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Sincerely yours, 

Lee Francis Lybarger. 



TARIFF PRIMER 



A GRAPHIC PRESENTATION 
OF THE 

FORDNEY-McCUMBER TARIFF 



WHAT IT IS 

HOW IT WORKS 

WHOM IT BENEFITS 

—BY- 
LEE FRANCIS LYBARGER 



Member of the Philadelphia Bar. 
Lyceum and Chautauqua Lecturer. 

Formerly President Inter- 
national Lyceum and Chautauqua 
Association of America. 



Illustrations by John H. Coakley 



TARIFF PUBLISHING COMPANY 

1819 BROADWAY, NEW YORK 



Hobaon Printfaur Company ^ \^ BM«»* 3 

Baaton. Pa. 



5"4 






Copyrighted, October, 1922 
By Lee Francis Lybarger. 



OCT 28 1922 



©C1A683919 



DEDICATED 

TO THE RIGHT 

OF THOSE WHO LABOR 

IN ALL LANDS AND CLIMES 

TO SELL THE PRODUCTS OF THEIR LABOR 

WHERE THEY CAN SELL THE DEAREST 

AND BUY WITH THEIR WAGES 

WHERE THEY CAN BUY 

THE CHEAPEST 



PREFACE 

Can a people be enriched by their own taxation? That is the 
question now confronting the American people. 

If a people can be enriched by the simple process of taking 
hundreds of millions of dollars annually out of the pockets of 
the Many, and pouring them into the huge pockets of the 
Privileged Few) then the Fordney-McCumber Tariff is the 
most beneficient piece of legislation in the History of the Re- 
public. If it be true that a people can be prospered by so 
sin^)le a method, then will the new Tariff lift our toiling mill- 
ions out of the perils of penury and want, up into the happy 
realm of abundance. 

Were the Tariff Issue so clear and definite as above stated, it 
would of course have disappeared long ago from our political 
history. No question about that. But it is not. On the con- 
trary, it is an issue so complex and involved, so mixed up and 
confused by the multiplied relations sustained even by the 
average citizen in the complex financial and industrial life of 
today, that after generations of discussion, we know but little 
more about the Tariff than we did at the beginning. 

The heroic and independent spirit of our "Sires of '76", 
would not have considered the toleration of so monstrous and 
extortionate a measure as the Fordney-McCumber Tariff for a 
single minute. Their fight was against Taxation : we fight/or Tax- 
ation. 

But the real facts in the case — and the dire consequences to 
the consuming public — were far easier to see then than they 
are today. Amidst the complexities of our modern civilization, 
the fact as to who pays and who gets — as to who are the Tariff's 
beneficiaries and who its victims — can now be disguised, con- 
fused and hidden in a thousand different ways. 

The Author's interest in this subject began far back in boy- 
hood days, when a student in the High School. More years of 
my life have been given to the study of the theory and the 
effects of a Protective Tariff — and of that universal thing, 
called Trade, which the Tariff seeks to obstruct — than to any 
other one problem connected with the general welfare. 



Added to these years of study and investigation has been the 
advantage of presenting the Tariff to Lyceum and Chautauqua 
audiences — composed of men, women and children. Long ago, 
from this most valuable experience, I learned that the thing 
most needed by the people in order to understand just what the 
Tariff is, how it works, and whom it benefits, is not Argument 
but Analysis — a division into classes of the persons and things 
affected at each step in the unfolding of the problem. 

The sole aim and purpose of the TARIFF PRIMERistoclarify 
and simplify the Tariff Issue. The method of working has 
been simply to analyze, and then classify in opposite groups, 
all the elements in each stage of the problem — taking them up 
carefully, just one at a time. A classification once made, or a 
principle once clearly established, is never abandoned. From 
the beginning to the end of the book I trust the reader will find 
that all the lines of reasoning run clear and straight. My 
endeavor has been to fully and logically think out each problem 
for itself; seel<ing always to find the principle involved, using 
details and statistics only for illustration. 

Thus do we advance steadily from the first chapter to the 
last, following the definite plan of taking up and discussing just 
one thing at a time, always striving to so clearly and definitely 
state facts and conditions that the reader can think them out 
for himself — and find pleasure and entertainment in doing it. 

The cartoons and illustrations have been carefully designed 
in order to give the reader the imagery, the mental pictures, 
the concrete symbols, absolutely necessary for the mastery of 
the subject. Realizing that at least 80% of all our knowledge 
comes thru the eyes, an abundance of charts and diagrams has 
also been used, based wholly on Official Government Statistics. 

With all the vital questions and problems of the Tariff Issue 
clearly analyzed and definitely stated for the American people, 
this age-long superstition, this gigantic delusion that a people 
can be enriched by their own taxation, will go the way of all 
the other delusions and superstitions of the past. 

Mifflinburg, Pa. 
October 12, 1922. 



TABLE OF CONTENTS 

CHAPTER I. Home Goods, Foreign Goods and the Tariff Wall 1 

CHAPTER II. Motive that Builds Tariff Walls 4 

CHAPTER III. The Worid Price Level and the Tariff Price Level 7 

CHAPTER IV. Putting Foreign Goods Over the Tariff Wall ... 11 

CHAPTER V. Price-Fixing Inside the Tariff Wall 13 

CHAPTER VI. Monopolizing the Home Market 17 

CHAPTER VII. How Much Is the Tariff Tax? 20 

CHAPTER VIII. Where the Tariff Costs More Than the Goods 23 

CHAPTER IX. Does the "Foreigner" Pay the Tariff? 25 

CHAPTER X. Two Streams of Revenue 29 

CHAPTER XI. The Higher the Rate— The Less the Revenue . . 32 

CHAPTER XII. Who Gets It— Employees or Employers? 35 

CHAPTER XIII. Does the Tariff Protect or Plunder Labor? 40 

CHAPTER XIV. The Farmer and the Manufacturer 44 

CHAPTER XV. The Farmer as an Exporter 49 

CHAPTER XVI. Can the Farmers Form a Trust? 53 

CHAPTER XVII. Does the Importation of Foreign Goods Throw 

Our Own Labor Out of Employment? 57 

CHAPTER XVIII. Can We Import Without Exporting? 61 

CHAPTER XIX. Our "Favorable" Balance of Trade 65 

CHAPTER XX. My Two Islands 71 

CHAPTER XXI. Revenue Tariffs vs. Protective Tariffs 79 



APPENDIX 

A — Imports and Exports from 1790 to 1921 82 

B — A Study in World Commerce 89 

C— Effects of War on Prices 91 

D— Price History from 1850 to 1920 93 

E — Tariff Rates from Custom House Reports 95 

F — ^25 Leading Products Both Exported and Imported 96 

G— Fordney Tariff at Work 96 

H— Wool Prices from 1880 to 1921 96 

I — Payne-Aldrich, Underwood and Fordney Tariffs 97 

J— The Scramble Begins for Still Higher Rates 100 



CHAPTER I. 
Home Goods, Foreign Goods and the Tariff Wall 

For untold centuries the word "foreign" has filled mankind 
with fear, because "foreigner" and "foe" meant the same thing. 
And the fear that there was some subtle danger, some hidden 
evil, even in "foreign goods" has continued through all the long 
and bloody centuries of war and hate and strife. This vague 
fear and indescribable dread of "foreign goods" still exists — ■ 
and that, too, among so-called "civilized" nations. If this were 
not true. Protective Tariffs would have disappeared long ago 
with the other superstitions of the past. 

On the opposite page our artist has given us the three ele- 
ments essential to a complete discussion of the Tariff. In this 
picture we have the whole foundation of the subject. These 
three elements are: Home Goods, Foreign Goods, and the 
Tariff Wall between. 

Radical and far-reaching as is the distinction which all na- 
tions make between Home Goods and Foreign Goods, and pro- 
foundly as does this distinction effect the economic welfare and 
happiness of all mankind, yet the reader needs to realize at the 
very outset that it rests upon nothing more permanent and sub- 
stantial than national boundaries. On this boundary all Tariff 
Walls are built. National boundaries are wholly a matter of 
accident and chance, of whim and caprice, of war and treaty. 
As we learned in geography, national boundaries are not 
"natural" lines but "imaginary" lines drawn upon the surface 
of our earth. 

The 49th parallel of latitude forms the larger part of the 
boundary which separates us from Canada. All products 
coming in from beyond that parallel are "foreign", and if 
allowed to come in "free" it is supposed would destroy our 
great agricultural interests. By all means wheat from Alberta 
must be kept out. For twenty-four years has Mr. Porter J. 
McCumber been defending North Dakota from the disasters 
of such an "invasion". 

And yet the political slogan of an early Presidential cam- 
paign was: "54-40 or Fight!" They did not get either. But 
if the parallel of 54-40 had been established as our northern 



2 TARIFF PRIMER 

boundary, the wheat fields of Alberta and of all northwestern 
Canada, would now pour their golden harvests into the gran- 
aries of Chicago and Minneapolis as freely as do the wheat 
fields of the Dakotas and Minnesota. What makes it injurious 
in the one case, but beneficial in the other? Merely the acci- 
dental location of a national boundary. Therefore, it is not the 
nature of the goods, or the character of the people producing 
them, but those "imaginary lines", called national boundaries, 
which divide all the products of human toil into Home Goods 
and Foreign Goods. 

We are not the only people who have a Tariff Wall, though 
from Protectionists' speeches in Congress, one would infer that 
this is our distinctive and exclusive creation. There are as 
many Tariff Walls on this planet as there are Governments. 
Canada, Mexico, the Republics of Central America and the 
countries of South America — all have Tariff Walls. Crossing 
the ocean, Tariff Walls and lines of fortification mark the bound- 
aries of all the countries of Europe. Every government on the 
continent of Africa is encircled by a Tariff Wall. The same is 
true of Asia, of the distant Orient, and of many of the islands 
of the sea. In short, wherever there is a Government on this 
earth there also is a Tariff Wall. 

Nor is that all. "We the people of the United States", now 
have but one Tariff Wall. But before the formation of the 
Federal Constitution in 1789, each of the thirteen colonies had 
a Tariff Wall around it. Connecticut, Massachusetts, New 
York, Pennsylvania, North Carolina — all had Tariff Walls. 
Wherever there was a boundary line separating two colonies, 
there also was a Tariff Wall. 

How history does persist in enacting over and over again its 
ancient follies! The same bickering and haggling and "log- 
rolling" which occupied the American Congress for nearly two 
years; also occupied the legislatures of the Colonies. Further- 
more, the same "arguments" which seek to justify the exist- 
ence of the one Tariff Wall around the entire Union of 48 states, 
would also justify the building of a Tariff Wall around each 
state. Therefore, if these "arguments" of Fordney, McCumber 
and their followers are true, then we should have 48 Tariff 
Walls instead of one! 

In Europe, a century or so ago, there was a Tariff Wall 
around each county, principality, dukedom, and feudal estate. 
It is said that a French peasant in going from Versailles to Paris, 
with his cartload of garden products had to pass through eigh- 



Home Goods, Foreign Goods and the Tariff Wall . 3 

teen Tariff Walls, paying toll at each wall, before he reached 
the gates of Paris — and still had one more toll to pay before he 
could get inside the Tariff Wall around that city! And so the 
idea is not modern. It is centuries old. 

Senator Calder, of New York, recently claimed, before a 
labor audience, that the reason wages are higher in this country 
than in any other is because we have a Protective Tariff — im- 
plying, of course, that other countries have not. Nothing 
more ignorant or deceptive could possibly have been uttered. 
Whatever the reason, it is not this. Practically all countries 
on earth have a Protective Tariff. And statistics show that, 
as a general rule, the higher the Tariff the lower the wages of 
labor, and the more impoverished the people. 

Thus do Tariff Walls, separating Home Goods from Foreign 
Goods, exist everywhere — and have existed for centuries. 
They are as universal as greed; as persistent as Selfishness and 
Plunder. 



TARIFF PRIMER 



CHAPTER II. 
MOTIVE THAT BUILDS TARIFF WALLS 

In the lowest stages of human society all the products which 
enter into the food, clothing and shelter of the people of the 
tribe are found within the narrow circuit of their own immedi- 
ate neighborhood. And nothing better indicates, the steps in 
the Intellectual Progress of the race than the ever increasing 
distance, over sea and land, from which their daily supplies are 
drawn. When we reach the highest civilization we find the 
articles consumed even by "the common people'* are drawn 
from every country, zone and clime. 

Thus does the March of Progress, through the instrumen- 
tality of International Trade, enable the humblest citizen or 
subject in any nation to levy upon the vast variety of products 
of every sea and land, of every mountain range, valley and 
plain of the whole round earth, to satisfy the hunger and needs 
of his life — unless prevented by a Tariff Wall. 

Whoever would form a true mental picture of Trade must 
encompass the whole earth in his imagination. The compara- 
tively few whose intellectual development makes such a vision 
possible, believe in Trade. The unnumbered millions whose 
narrow and provincial minds make a conception of such mag- 
nitude impossible, believe in Tariff Walls. It is all a matter of 
imagination, of mental capacity — of Intellectual Development. 

Back of that towering Tariff Wall, in every nation — under 
every form of government — are two classes of people: The 
Producers of Home Goods and the Consumers of both Home 
and Foreign Goods. In this we have the Motive which in all 
lands and nations builds Tariff Walls. 

It is quite natural for local Producers everywhere to object 
to this intrusion of Foreign Goods into the Home Market. 
And the cause of this universal — and we might say interna- 
tional — objection of all local Producers to the importation of 
Foreign Goods is easy to discover. 

It is found in the fact that they must compete with these 
Foreig^n Goods in what they would like to consider their own 
exclusive market. And in order to compete they must keep 
their prices down to the prices of the Foreign Goods offered. 



Motive that Builds Tariff Walls 5 

Otherwise, local consumers will naturally, and rightly, buy the 
Foreign Goods. 

From this vital fact comes a clear vision of the purpose, the 
motive, the function, of a Tariff Wall: THE OBJECT IN BUILD- 
ING A TARIFF WALL AROUND ANY COUNTRY IS TO ENABLE 
LOCAL PRODUCERS OF CERTAIN PRODUCTS TO COMPEL 
THE LOCAL CONSUMERS OF THESE PRODUCTS TO PAY 
MORE FOR THEM THAN THEY WOULD HAVE TO PAY IN THE 
OPEN MARKET. 

In other words, the Producer has carried his conflict with the 
Consumers of his products into the Halls of Congress. He has 
succeeded, by means of campaign contributions and other 
forms of "influence,'' in securing from Congress such laws — 
called Tariffs — as enable him to compel the consumers of his 
products to pay him more than they would otherwise have to 
pay — were it not for these laws. 

When we reflect on the matter, however, we see that there 
is no more reason — in fact, there is not as much reason — why 
the Producer should have a law compelling the Consumers to. 
pay him more than the Market Price for his products, than, 
that Consumers should have a law enacted by Congress which 
would compel Producers to sell their products for less than the 
Market Price. Had you ever thought of that? If not, then 
here is a chance to do some real thinking for yourself. 

You would not vote to build a Tariff Wall around your town, 
giving your merchants a monopoly of the Home Market; thus 
preventing you from going to any other town or city to buy 
any part of the necessities of life. Nor would you vote to 
build a Tariff Wall around your county, or even around your 
state. Since you demand an Open Market for the people of 
your town, an Open Market for the people of your county, and 
an Open Market for the people of your state, why do you not 
also demand an Open Market for the hundred and ten Million 
people of your nation? 



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The World Price Level and the Tariff Price Level 7 

CHAPTER III. 
THE WORLD PRICE LEVEL AND THE TARIFF PRICE LEVEL 

In the illustration on the opposite page, our artist has given 
us a symbol of the machinery which Congress has put into the 
hands of the Producer to enable him to get from the Consumer 
higher prices than the Consumer would have to pay in the open 
market. It shows how a Tariff Wall raises the PRICE LEVEL 
of the goods and products it ^'Protects." The illustration tells 
the whole story. Look it over and think it out for yourself. 

These billions of dollars' worth of Foreign Goods which 
every year we ourselves demand, need and consume, flow 
directly across the ocean to our shores down at the WORLD 
Price Level. There they are — down there. But we cannot 
get them — down there. Before we can reach them, or they 
reach us, they must flow up over the towering Tariff Wall — to 
the cost-plane of the TARIFF PRICE LEVEL. 

All goods shipped to us from any part of the world — Europe, 
Asia, Africa, Canada, South America, Mexico, Australia — must 
pass thru one of the scores of Custom Houses along the bound- 
ary separating us from the rest of the world, be inspected by 
custom house officials, and a Tariff Tax levied on them — unless 
specifically exempted by being on the Free List. 

Therefore, in each Custom House this Taxing Machinery 
must be set up and a separate Tariff Wall built for each class 
of articles, in order to compel us to purchase them — not at 
their normal price in the Open Market — but at the "Price In- 
creased by the Tariff." 

In order to thus systematically tax everything that labor has 
produced, our Tariff Makers — beginning as far back as 1883 — 
have divided all material substances and products which satisfy 
the desires and needs of human life into Fourteen Classes — 
called Schedules. 

There is absolutely no form of wealth which the genius of 
man has created, no product or invention which his skilled 
hands have fashioned, that does not fall within one of these 
Fourteen Schedules. A mere enumeration of their titles, to- 
gether with a few items under each, will give the reader some 
conception of the vast multitude of products in the huge stream 
of life's necessities, which it is now proposed shall be made to 
pass over "the highest Tariff Wall in our history." 



8 TARIFF PRIMER 

(1) A— Chemicals, Oils and Paints: All forms of medi- 

cines and drugs, perfumes, floral waters, flavoring 
extracts, porous plaster, etc. 

(2) B— Earth, Earthenware and Glassware: All 

forms of bricks and clays, crushed limestone, watch 
crystals, tiles, china ware, Portland cement, mir- 
rors, plate glass, marble, spectacles, tombstones, etc. 

(3) C— Metals and Manufactures of Metals: Nuts, 

bolts and washers, nails, tacks and brads, corset 
steels, sewing machines, iron and aluminum ware, 
harness, saws, automobiles and parts, razors, 
watches, clocks, cutlery, etc. 

(4) D— Wood and Manufactures of: Furniture, porch 

and window blinds, picket pailings, toothpicks, 
butchers' skewers, casks, coffins, clothes pins, etc. 

(5) E— Sugar and Molasses: Cane sugar, beet sugar, 

maple sugar, syrups, candies and all other forms of 
confectionery. 

(6) F— Tobacco and Manufactures of: Wrapper and 

filler tobaccos, smoking tobacco, cigars, cigarettes, 
chewing tobacco, etc. 

(7) G — Agricultural Products and Provisions: Live 

stock, meat, fish, vegetables, milk and cream, but- 
ter, cereals, fruits, nuts, flours, bread, preserves, 
seeds, etc. 

(8) H— Spirits, Wines AND Other Beverages: Brandy, 

cordials, malt extracts, soda water, mineral waters, 
cherry and fruit juices, etc. 

(9) I— Cotton and Manufactures of: Cotton staple, 

cotton yarns, sewing thread, tire fabrics, table 
covers, cotton gloves, cotton clothing, bedspreads, 
sheets and pillow cases, collars and cuffs, cotton 
cloth, cotton sheeting, pile fabrics, shoe strings, 
lace curtains, etc. 

(10) J— Jute, Hemp and Flax: Flax straw, fiber towels, 

bags and bagging, table damask, linoleum, floor oil- 
cloth, sheeting, straw mattings, etc. 

(11) K— Wool and Manufactures of: Wool and hair of 

sheep, goats, alpaca and like animals, wool yarn, 
blankets, robes, webbing, belts, hose, gloves, knit 
fabrics, underwear, all carpets and rugs, all clothing, 
wearing apparel, etc. 



The World Price Level and the Tariff Price Level 9 

( 12 )Lr— Silk and Silk Goods : Sewing silk, plushes, velvets, 

ribbons, gloves, handkerchiefs, hosiery, underwear, 

all wearing apparel, all other silk manufactures. 

( 13 )M— Paper and Books: Printing paper, letter paper, 

carbon paper, wall paper, paper board, wrapping 

paper, books of all kinds, leather-bound books, 

photograph albums, all other manufactures of 

paper. 

(14 )N — Sundries: Straw hats, tooth brushes, combs, all 

forms of buttons, all manufactures of leather, all 

embroideries and everything else not previously 

mentioned. 

Look about you in your home. There is scarcely a single 

article on which the eye can fall that does not bear a Tariff Tax, 

Even your sewing machine has been taken off the Free List 

and given a Tariff Tax. There is a Tariff Tax on practically 

every article of food on your table. This is true also of your 

dishes, silverware, cutlery, napkins and tablecloth ; as well as the 

table itself, the lighting fixtures above it, and the chairs upon 

which you sit. There is no article of clothing on your person 

down to the minutest detail which does not bear a Tariff Tax. 

The same is true of the house itself and of all the furnishings, 

ornaments, and kitchen utensils which it contains — from the 

cement in the foundation, the carpets on the floor, the paper 

and pictures on the wall, the glass in the window^ the curtains 

and shades, the tile in the fire-place, on up to the nails in the 

shingles on the roof — all bear a Tariff Tax. 

Some rhymester, with a keen sense of the humor and ab- 
surdity of the whole situation, has stated the case quite fully 
in poetic form: 

"We are taxed on our clothing, our meat and our bread. 
On our carpets and cupboard, our table and bed; 
On our knives and our spoons, on our fuel and lights — 
We are taxed so severely we can't sleep o'nights. 

We are taxed on our hats, our shoes, and our shops, 
On our blankets and stoves, our brooms and our mops; 
On our rice and our sugar, and when we must die. 
We'll be taxed on the coffin in which we shall lie. 

We are taxed on all wants by Providence given. 
We are taxed on the Bible which points us to Heaven; 
And when we ascend to that heavenly goal. 
They will if they can, put a tax on our Soul." 



Putting Foreign Goods Over the Tariff Wall 11 



CHAPTER IV. 

Putting Foreign Goods Over the Tariff Wall 

The picture on the opposite page gives us a "snap shot" of 
the importer of Foreign Goods in the act of shifting the Tariff 
Tax over on the American Consumer. 

The Tariff Tax of 100%, which we have assumed our Govern- 
ment had levied on his goods, has already been paid by the im- 
porter. He had to pay that before he could land his goods. 
The foreign cost of his goods, by the time he gets them to our 
shores, is assumed to be $400 per package. Our importer now 
has $800 capital invested in each package — $400 in the goods 
and $400 more in the tariff on the goods. 

Now what will he do? We know exactly what he will do. 
He will add the cost of the Tariff to the cost of the goods — 
making the price to us $800 instead of $400 — and shove the 
goods over the wall. He will also add two profits — one on the 
goods, and the other on the tariff. 

This process of shifting the cost of the tariff over on the Con- 
sumer holds to the last detail of the billions of dollars' worth of 
commodities which we annually import. In reference to each 
bill of goods, and each separate item imported, THE TARIFF 
Tax Levied by the Government Is Paid by the Mer- 
chant Who Brings the Goods Over— and by Him Is 
Added to the Cost of the Goods— and so is Paid by 
THE Consumer of the Goods. 

Thus do we see that it is not the importer, but the Consumer, 
who pays the Tariff. And on scores of articles, under the new 
Profiteers' Tariff, the cost of the tariff will be higher than the 
cost of the goods. But it will not be listed on our bill as a 
separate item — so much for the goods, so much for the tariff. 
If this were done, the inordinate rates in the Fordney-McCum- 
ber Tariff would not last a month without producing a revolu- 
tion. It is a secret, hidden mode of taxation. The people 
pay it without knowing that it is being paid. Fordney goes 
on Shakespeare's theory: 

"He who's robbed, but knows not of it, 
IS NOT ROBBED AT ALL." 



Price-Fixing Inside the Tariff Wall 13 



CHAPTER V. 
Price-Fixing Inside the Tariff Wall 

Having shown that on the outside of our Tariff Wall the first 
act of those who bring over Foreign Goods is to add the cost of 
the tariff to the cost of the goods, our artist here shows us what 
is also taking place on the inside of the Tariff Wall. There- 
fore, no matter on which side of this towering structure you cast 
your gaze you behold the same little game — ADDING THE 
Cost of the Tariff to the Cost of the Goods. 

The Only Object in Building a PROTECTIVE Tariff 
Wall Around This Country is to Increase the Price 
of Foreign Goods to American Consumers, so that 
THE American Producer Can Also Increase the 
Price of His Goods to these Same American Con- 
sumers. 

If it were not for the fact that High Tariffs, by increasing the 
price of Foreign Goods to American people, also make possible 
a parallel increase of price in the competing Home Goods, 
There Would Be No Protective Tariff Wall Around 
This Country, or Any Other Country. 

Now let us get an exact, scientific statement of the effects of 
High Tariffs on these two classes of goods. It is this: First, 
High Tariffs necessitate an increase in price of the Foreign 
Goods on which they are levied. Second, they make possible 
an increase of price on similar Home Goods which compete 
with them. They necessitate the one — they make possible the 
other. And it is for the sole purpose of making possible an 
increase in the selling price of Home Goods that all Protective 
Tariff Laws are passed. 

What other purpose could they have in levying such extor- 
tionate rates? They are not for the purpose of raising money 
for the Government. Low-rate Revenue Tariffs do that. 
Therefore, High Tariffs are levied solely for the purpose of 
raising revenue for private pockets. And to do this they must 
increase the price of Foreign Goods, thus making possible a 
parallel increase of price of the competing Home Goods. 

During the framing of a Tariff Bill, Washington is over-run 
with the lobbyists and representatives of the different "inter- 



14 TARIFF PRIMER 

ests." They present to those in charge of the bill a statement 
showing the percentage rate of increase which they desire to 
make in the selling price of their products to their American 
Consumers — and which increase they insist they must have in 
order to continue to do business. And this BECOMES THE 
Tariff Rate on their Foreign Competitor's Goods. 

This gives us a broader and truer vision of the full signifi- 
cance of Protective Tariffs. We have already seen that the 
whole stream of Foreign Goods, amounting to some five billions 
annually, must go up over this towering Tariff Wall, with prices 
increased anywhere from 25% to 150%. Now we are called 
upon to form a still larger vision of that huge stream of Home 
Goods — more than ten times greater — which it is the purpose 
of the Fordney-McCumber Tariff to increase in cost to us 
Just the Same as if they also Flowed Over the 
Tariff Wall, Side by Side With Foreign Goods. 

The illustration at the head of the chapter might be thought 
to imply that all commodities can be produced in this country 
as cheaply as they can be produced abroad. Hence the reason 
for marking the whole of the increased price of Foreign Goods, 
necessitated by our High Tariff Wall, as simply so much addi- 
tional "profit" given to the Producers of similar Home Goods. 

On the other hand, our Tariff Makers have assumed just the 
reverse. They have assumed that we can produce absolutely 
nothing in this country as cheaply as it can be produced in 
foreign lands. The proof that this is their supposition is found 
in the fact that they have put tariff rates — and on thousands of 
articles high tariff rates — on practically everything that is pro- 
duced in this country — everything. Had you never thought 
of that? 

Thus would Mr. Fordney and his followers have us believe 
that with all our supposed skill, knowledge, education, machin- 
ery and inventive genius; that with all our schools, colleges and 
universities; even the most ignorant, degraded, illiterate and 
unskilled laborers on earth can produce anything cheaper — and 
therefore more efficiently — than our own laborers can produce 
it. And for that reason, undersell us in our own markets. 
Some tribute to American Labor! 

My answer is this: WHILE THERE ARE MANY COMMODI- 
TIES Which We Cannot Produce as Cheaply in This 
Country as They Can Be Produced Abroad, There 
Are Vastly More Commodities Which We Can Pro- 
duce, AND Do Produce, More Cheaply Than Any 



Price-Fixing Inside the Tariff Wall 15 

Other Country in the World. Therefore, our artist's 
illustration is true as to principle, and holds as to detail in refer- 
ence to the big majority of all our productions. 

The proof of the above statement is found in the fact that we 
exported over $8,000,000,000 worth of goods during 1920. If 
we could not produce and undersell foreign competitors in their 
own market, they would not have bought these goods. But if 
we could undersell them in their own market — after paying the 
cost of transportation and the tariff in their country — surely 
we can undersell them here. No sane man will deny that. 

A profound analysis thus enables us to divide all our produc- 
tions into two distinct classes: (1) Those which we can pro- 
duce more cheaply than we can buy from abroad. (2) Those 
which we cannot produce as cheaply as we can buy them; and, 
therefore, which we cannot produce at all without the aid of a 
Protective Tariff. 

The question in reference to the first class of productions can 
have but one answer: The Added Price Which the 
Tariff Makes it Possible for Their Producers to 
Get from Us Is Simply a Bounty, a Bonus. It is tribute, 
graft, plunder — extortion. No man or woman with any intel- 
lectual pride will deny that proposition. 

But what shall we say of that second class of goods and pro- 
ducts which I myself claim, or admit, can not be produced in 
this country without the aid of a Protective Tariff? To this 
also there can be but one answer: Any LINE OF GOODS OR 
Products Which Cannot Be Produced in This Coun- 
try Without the Aid of a Protective Tariff— Ought 
Not to Be Produced At All. And that for the reason 
that all such goods and products are produced at an absolute 
economic and financial loss to the country. 

To illustrate, the same amount of labor expended in Louis- 
iana in producing corn, cotton or any other ''native'^ product, 
and traded for sugar, would give far more sugar than it now 
gives by producing sugar direct. Thus by means of Protect- 
ive Tariffs we are diverting labor to the least productive sources, 
instead of employing it in the most productive sources. This 
unfortunate experiment of trying to produce a Tropical plant 
in the Temperate Zone has been an economic loss of billions of 
dollars to the American people. And in the new Tariff the 
stage is again set for the Sugar Trust to collect hundreds of 
millions more. 



Monopolizing the Home Market 17 



CHAPTER VI. 
Monopolizing the Home Market 

In the picture on the opposite page our artist has given us a 
new situation, one in which the American Producer does not 
increase the cost of his goods to the full extent that the Tariff 
has increased the cost of his foreign competitor's goods. 

In doing this he shows us how the American Producer, by 
getting a Tariff Wall high enough, can make huge profits and 
still undersell his foreign competitor — and thus establish a 
monopoly of the Home Market for his own products. 

In the last picture we saw the American Producer marking 
up the price of his goods to Consumers to an equality in price 
with his foreign competitor's goods, thus placing Home Goods 
up on the Tariff Price Level side by side with Foreign Goods. 
In the present illustration he takes just the opposite course. 

These two drawings graphically picture to us the two possible 
alternatives, which a Tariff Wall presents to favored Producers 
in every country. In the first alternative, prices of Home 
Goods are boosted clear to the top of the wall. While by this 
course they will supply only a part of the local demand — the 
rest being supplied with Foreign Goods — THEY WILL Get 
More for What They Do Sell. 

The second alternative is that of taking advantage of only 
a part of the increase of price which a High Tariff makes pos- 
sible. In the illustration, the Tariff Wall raised the price of a 
given foreign product from $400 to $800. The American Pro- 
ducer, by raising his price to only $700, keeps the Foreign Goods 
out, and establishes a monopoly of the Home Market. WHILE 
Making a Less Profit on Each Individual sale, yet he 
has the supplying of the entire home demand for himself. 

Even for the lower prices at which manufacturers must sell 
their products in the Home Market, in order to "corner" this 
market, THEY HAVE A Remedy, and a good one. This ex- 
plains the terrific and disgraceful scramble at Washington dur- 
ing the pending of a Tariff Bill to secure high rates. 

The instructions of the Big Interests to the representatives 
they are sending to Washington during the framing of a Tariff 
Bill is to this effect: "Get the tariff high enough on our for- 



18 TARIFF PRIMER 

eign competitor's goods. Make sure of that. Then we can 
raise prices as high as the people can possibly pay, and still hold 
a monopoly of the Home Market.'' Therefore, even tho selling 
under the foreign price increased by the Tariff, they can still 
get from the people "ALL THAT the Traffic Will Bear." 

It makes no difference to us, the Consumers, which course is 
taken. Either one permits the forming of Trusts and Com- 
bines. In order to raise the price of Home Goods up to the 
cost of Foreign Goods on the Tariff Price Level, combinations 
and "gentlemen's agreements" must be made to prevent com- 
petition among themselves — and thus keep prices up. No 
Tariff Wall Can Long Benefit Any Industry With- 
out THE Aid of Trusts and Monopolies. 

Therefore, if the Producers of any "protected" product are 
unable to "get-together" and form Trusts and Combines — as is 
particularly true of the millions engaged in agriculture — then 
local competition among themselves will hold the price of their 
product down to the same general level that would exist IF 
There Were No Tariff Wall. Thus are Tariffs and 
Trusts inseparable. The Tariff makes the Trust possible — 
the Trust makes the Tariff useful. 

Mr. Fordney has asserted, over and over again, that he is 
not seeking to establish a Monopolistic Tariff, but a Competi- 
tive Tariff. In saying this Mr. Fordney shows himself to be 
either an ignoramus in economics or a demagog. The reader 
may choose whichever term seems the more charitable. 

Why do I say this? Because to make a Tariff Bill "competi- 
tive" — with average rates of between 60% and 70% — depends 
not on Mr. Fordney, but on American Producers taking full 
advantage of the price-fixing opportunities which he has so 
liberally given them; by so marking up the price of their 
goods as to place them on an equality with Foreign Goods at 
the Tariff Price Level. Then the cost of either will be exactly 
the same to us. That alone would make a "competitive" 
Tariff. 

However, if that were done, two very surprising things 
would happen. First, not only will FOREIGN GOODS be in- 
creased to us the full extent of the tariff rates on them, but the 
volume of HOME GOODS, ten times greater, will also be in- 
creased in cost to us the full extent that the Tariff Wall in- 
creased the cost of Foreign Goods. And the higher the tariff 
rates, the higher will be the price of Home Goods. Some con- 
tribution to old H. C. L. 



Monopolizing the Home Market 19 

And yet Fordney, McCumber and their followers have re- 
peatedly claimed that their tariff WILL NOT INCREASE THE 
Cost of Home Goods. Let us see if it would not. To make 
it a "competitive" tariff Foreign Goods must come in. That 
much is certain. But they cannot come in unless Home Goods 
are marked up to an equality of price with them; so that whether 
we buy Foreign Goods or Home Goods, we must get both up 
on the Tariff Price Level — at the same cost to us. Therefore, 
The Only Way Normal Competition Can be Re- 
stored Between Us and Foreign Countries, Under 
THE Monstrous and "Unconscionable'' Rates in the 
Fordney-McCumber Tariff, Is to Enormously In- 
crease THE Costs of All Domestic Products to the 
American People. 

In the second place, if Mr. Fordney's Tariff is what he claims 
it is — a Competitive Tariff — Foreign Goods would still come in. 
But he also claims that foreign importations THROW AMERI- 
CAN Labor Out of Employment. If this Tariff allows 
Foreign Goods to come in, which it must do in order to be a 
Competitive Tariff, instead of a Prohibitive Tariff, then it will 
also throw labor out of employment just the same as he claimed 
the Underwood Tariff did. The only difference would be that 
under his Tariff labor will have to pay far more for the necessi- 
ties of life than it did under the Underwood Tariff. So labor 
will gain nothing in the way of employment, but will lose tre- 
mendously by having to pay vastly more for the necessities 
of life! 



20 TARIFF PRIMER 



CHAPTER VII. 
How Much is the Tariff Tax? 

Your state and county tax runs only so many mills on the 
dollar for each different item. When it gets as high as three 
cents on the dollar you begin to protest. You know there is 
extravagance somewhere. Three cents on the dollar is only 
3%. The Tariff Tax on any article is seldom less than 25%. 
That is eight times as much. In many cases your Tariff Tax 
is twenty-five times as much as your state and county tax. 
Think of it. And yet you grumble at the one, but are in favor 
of the other. You know that the one is a burden. But some- 
how you have the idea that a TAX TWENTY-FIVE TIMES 
Greater Is a Blessing! 

While the tariff rate usually begins at 25%, it does not end 
there. It goes to 35%, 50%, 60%, 80%, 100%. It goes even 
beyond this to 125%, and on up to 200% — and more. The 
Payne-Aldrich Tariff of 1909 had an average rate on all articles 
of about 60%. Before his death. Senator Penrose, then Chair- 
man of the Senate Finance Committee, is reported to have said 
that some of the rates in the Fordney Tariff Bill, which had just 
passed the House, would go as high as 800%. 

There are two classes of Tariff duties: Specific and Ad Val- 
orum. The latter means "according to value." For instance, 
the McKinley Tariff of 1890 levied an ad valorum duty of 50% 
on women's and children's dress goods, 60% on ready-made 
clothing and wearing apparel, 60% on webbings, beltings and 
ribbons. On Ambussen, Saxony and Brussels carpets, 40%. 
On woolen cloths — worth more than 40c per pound — 50%. 
Nearly all of these rates were continued by the Dingley and the 
Payne-Aldrich Tariffs, and now by the Fordney-McCumber 
Tariff. 

A Specific Duty is levied, not "according to value'', but ac- 
cording to quantity. For instance, the Tariff of 1872 laid a 
specific duty of $28 per ton on steel rails! On the articles 
above mentioned, the McKinley Tariff laid a specific duty of 
12c a yard on women's and children's dress goods, 50c a pound 
on ready-made clothing, 60c a pound on webbings, beltings 
and ribbons, 60c a square yard on Ambusson and Saxony car- 



Eow Much Is the Tariff Tax? 21 

pets, 44c per square yard on Brussels carpet and 44c a square 
yard on all woolen cloths worth over 40c a pound. 

Both duties are used on hundreds of articles. When so used 
they are called Compound Duties. In the McKinley Tariff, 
the Compound Duties on women's and children's dress goods, 
gave a total tariff rate of 104%; on ready-made clothing and 
wearing apparel, 80%; on webbings, beltings, ribbons, etc., 
94%; on Ambusson and Saxony carpets, 69%; on Brussels car- 
pets, 81%; and on woolen cloth mentioned above, 143%. These 
rates were largely preserved in the Dingley Tariff of 1897 and 
most of them were increased in the Payne- Aldrich Tariff of 1909, 
while the rates in the latter tariff have been perpetuated, and 
many of them increased, by the Fordney-McCumber Tariff. 

As showing still fiirther the effects of compound duties, the 
McKinley Tariff imposed a total duty of 112% on cheap woolen 
yarns, 108% on cheap woolen blankets, 130% on worsted goods, 
138% on cheap knit goods, and on the lowest grade of pearl 
buttons, 280%. 

The effect of compound duties is to put the highest tariff 
rates on the cheapest goods, thus throwing the great burden of 
Tariff Taxation on the toiling masses of any country. The ex- 
planation is clear. For instance, if the ingrain carpets, with a 
specific duty of 22c per square yard, have a foreign value of 
only 22c per square yard, then the poorer classes who must buy 
the cheaper grades would be paying a hundred per cent, on the 
specific duty alone. To this was added a 40% ad valorum duty. 
It is estimated that the specific duty of 31c per pound in the 
Fordney-McCumber Tariff on scoiired wool, will make a tariff 
rate of 137% on some of the cheaper grades of wool. 

Before the war our total dye bill was $15,000,000. That is, 
we used only $15,000,000 worth of dye each year in this country. 
When the importations of dye from Germany were stopped, we 
started to manufacture our own dyes, and the Dye Interests in 
this country made $150,000,000 profit on four dyes alone in six 
years. In other words, their profit on four dyes in six years 
was ten times our yearly dye bill before the war. The multi- 
millionaires back of the Dye Monopoly, fought for two years to 
secure an absolute embargo. They failed in this, but got a 
Compound Duty of 7 cents a pound, plus 60% — American 
Valuation — which practically amounts to an embargo. Noth- 
ing in the 'Tariff of Abomination" of 1829 can compare to that. 
There is but little hope for the future of a people who would 
tolerate such an outrage on human rights! 



22 TARIFF PRIMER 

To be brief, the Fordney-McCumber Tariff has perpetuated, 
and increased, the extortionate rates of the McKinley Tariff 
and of the Payne-Aldrich, both of which were overwhelmingly 
defeated at the polls in the first elections which followed. 

It is estimated that the Fordney Tariff will enable the Big 
Interests to take out of the pockets of the people of one single 
state— New York— a tribute amounting to $330,000,000! 

In the New York World of September 22, the day following 
the signing by President Harding of the Fordney-McCumber 
Tariff, I find a very compact summing up of the total cost to 
the American people of the new Tariff Tax. The article is as 
follows: 

"WASHINGTON, Sept. 21. — Every American family will pay an average 
of $160 a year more for clothes, food and other necessities because of the 
Fordney-McCumber Tarifif bill, Treasury experts said today. Although 
the total cost of living will be increased by $4,000,000,000,the bill carries 
a new provision authorizing the President to increase the rates 50%. if 
he desires. 

Of the total protection of $6,500,000,000, only $230,000,000 will be paid 
into the Treasury and the rest will go to the favored interests, according to 
the experts. 

The following is the estimated amount of protection on principal products: 

Cement, pottery, chinaware, $214,000,000; steel and other metals, $1,- 
148,000,000; wood, furniture, lumber, $297,000,000; sugar, confectionery, 
$333,000,000; tobacco, $429,000,000; food, agricultural products, $1,233,- 
000,000; cotton goods, $807,000,000; wool clothing, $760,000,000; silk and 
silk goods, $326,000,000." 

The consensus of opinion, to sum it all up, is that the Ford- 
ney-McCumber Tariff will increase the cost of life's necessities 
to the American people about $4,000,000,000 annually. 

Thus do we hope to enrich ourselves by our own taxation — 
and by the most elaborate, detailed and burdensome system of 
taxation the world has ever known. How such a hope should 
have gotten possession of the brain of an enlightened people is 
beyond human comprehension. Other people have fought and 
died to prevent taxation. We fight to obtain it. Other people 
have declared it life's greatest burden. We regard it as the 
richest of blessings. Other people have risen in insurrection to 
prevent the tax rate from being raised. We express fear and 
alarm at the mere prospect of the Tariff Tax being lowered. 



Where the Tariff Costs More than the Goods 23 

CHAPTER VIII. 

Where the Tariff Costs More Than the Goods 

The reader is probably astounded at the suggestion repeat- 
edly made that on scores of articles the tariff costs more than 
the goods; hence that MORE THAN HALF OF THE CON- 
SUMER'S Money Goes, Not for the Goods, But for 
THE Tariff on the Goods. 

The custom house records of the past fifty years are strewn 
with such illustrations. I shall select only a few from a volume 
issued by the Government entitled "Imports and Duties, 1894- 
1907,'' page 889. I shall give the number of the table in which 
the reader will find the facts and figures as here set down. If 
facts can convince you then you are going to be convinced. 
YARNS, MADE WHOLLY OR IN PART OF WOOL 

(Act of 1897) 
Table No. 3562. — Value not more than 30 cents per pound. 
Year Foreign cost Cost of tariff Total cost to Rate of tariff 

of goods on goods Consumer Tax 

1898 $1,962.30 $2,803.10 $4,765.40 142% 

1899 997.30 1,770.87 2,768.17 177% 

1900 206.78 352.07 558.85 170% 
Table No. 3563. — Value more than 30 cents per pound. 

1898 $ 89,004.10 $ 93,040.84 $182,044.94 104% 

1899 128,296.06 131,292.96 259,589.02 102% 

CLOTHS, WOOLEN OR WORSTED 
Table No. 3588. — Value more than 30 cents per pound 

1894 $3,323.00 $5,345.63 $8,608.63 161% 

1895 3,870.00 6,384.81 10,254.81 165% 
Table No. 3589. — Value more than 30 cents and not more than 

40 cents per pound 

1894 $66,775.00 $97,312.01 $164,087.01 146% 

1895 23,530.00 35,794.51 59,324.51 152% 
DRESS GOODS, WOMEN'S AND CHILDREN'S LININGS, ETC. 

Table No. 3612. — Value not more than 40 cents per pound 
1898 $1,420,00 $2,268.59 $3,688.59 159% 

1902 1,094.00 1,640.62 2,754.62 149% 

1905 368.00 579.67 947.67 157% 

1906 265.00 444.35 709.35 167% 



24 TARIFF PRIMER 

PLUSHES AND OTHER PILE FABRICS 

Table No, 3641.— Value not more than 40 cents per pound 

Year Foreign cost Cost of tariff Total cost to Rate of tariff 

of goods on goods Consumer Tax 

1898 $ 89.00 $162.64 $251.64 183% 

BLANKETS 
Table No. 3571. — Value not more than 40 cents per pound 

1903 $ 371.00 $ 677.86 $1,048.86 183% 

1904 1,016.00 1,447.51 2,463.51 142% 

1905 507.00 807.74 1,314.74 159% 

1906 561.50 1,013.68 1,575.18 180% 
Enough has been given to show at least the basis of the con- 
clusion which every honest and enlightened thinker must reach 
in reference to "protection," and that conclusion is that it is 
THE MOST COLOSSAL AND OPPRESSIVE SCHEME OF PLUNDER 
WHICH THE GREED, CUPIDITY AND BRUTE SELFISHNESS OF 
MAN EVER CONCEIVED. It has taken its milUons and hundreds 
of millions out of the pockets of those whose poverty compels 
them to purchase the cheapest quality of goods. This is one of 
the mighty reasons why the millions are poor. They have been 
plundered into poverty by a long line of thieving Tariffs. 

You will observe, for example, that in "yarns, made wholly 
or in part of wool," the tariff rates on those having a value of 
30 cents, or less, go as high as 177%; while those having a 
value of over 30 cents a pound, have tariff rates of only 104%. 
The 104% is paid by those in comfortable circumstances, while 
the 177% Tariff Tax is paid by the poorest of our poor. This 
scheme of putting the highest Tariff on the cheapest goods will 
apply to the Fordney-McCumber Bill the same as it did to the 
McKinley, the Dingley and the Payne- Aldrich. 

I can see how such an economic policy could, and does, 
plunder, impoverish and despoil the multiplied millions of our 
own countrymen who must consume the cheaper grades of 
goods. But I cannot see how it can enrich them. I cannot 
see how it can lessen their burden of toil by increasing the cost 
of their necessities of life. Can you? 

Any policy which makes it possible, even in a single instance, 
to take from the toiling masses MORE THAN HALF of what 
they expend for the necessities of life to pay the Tariff on these 
necessities, deserves the righteous wrath and condemnation of 
any so-called "free'* people. If it really be true that people 
are "prospered" by being plundered, then great should be the 
prosperity of the toiling multitudes of America! 



Does the "Foreigner" Pay the Tariff? 25 



CHAPTER IX. 

Does the "Foreigner" Pay the Tariff? 

For generations Protectionists have used as one of their vital 
arguments to defend their acts in increasing the cost of the 
necessities of hfe that "THE FOREIGNER PAYS THE TARIFF". 
When the people would protest against exorbitant tariff rates, 
the answer was, "What does it matter to you? The foreigner 
pays the tax." Nor did this baseless subterfuge originate in 
this country. It was used in England long before the "Repeal 
of the Corn Laws" in 1846, and is still employed by Protec- 
tionists in Europe. 

The suggestion that "The foreigner pays the tax" has a 
deeper significance even than appears on the surface. It is a 
vague suggestion that the people of one country, by means of 
the -Tariff, can tax the people of another country; and thus 
compel them to pay the expense of the government of the 
people levying the Tariff. The idea dates back to foreign 
wars and conquests. It is the old thirst to tax and plunder 
"foreign" nations. 

For example. Senator McCumber gave this as his excuse for 
levying a preposterous rate on some product: "We have 
taxed the people all they can pay with our income tax, corpora- 
tion tax, etc. We still need more revenue. And so I thought 
I would collect the extra amount needed at the custom house.** 
The implication being that these "extra millions" would not 
come out of our pockets, but out of the pockets of the "for- 
eigners." This belief is universal. 

When a college student at Akron, Ohio, I heard William 
McKinley give expression to this remarkable proposition — and 
yet one that has been repeated in various forms in every Tariff 
Debate in Congress, and in every political campaign in which 
the Tariff was an issue. In an impassioned climax he said: 
"I Am Opposed to Taxing Our Own People to Meet 
THE Expense of Our Government So Long As There 
Are Foreign People to Be Taxed." The suggestion was 
greeted with tremendous applause! It was evidently regarded 
as a noble sentiment and the expression of real statesmanship. 
And yet, just as a matter of fact, he would not have done this 



26 TARIFF PRIMER 

if he could, because of the low morals involved; and could 
not if he would. 

However, Mr. Fordney — of whom we can say what Macau- 
lay said of George, the Third: *'He never learned anything nor 
forgot anything" — made this ignorant statement: My CON- 
TENTION Is— AND I Believe Time Has Proven It— That 
A Protective Tariff on the Imported Article Is 
NOT A Tax Imposed on the Consumer. Nine-tenths 
OF THE Duty Is Paid By the Foreigner." 

In the illustration used by our artist it was assumed that the 
cost of the goods to the merchant who brought them over — 
whether he was an American or a foreigner matters not in the 
least — was $400. Upon this we assumed a tariff tax of $400. 
That made the total cost to him of the goods up to that point, 
$800. Now the question is: did he sell those goods in this 
country on the basis of $400 only? If so, then he himself paid 
the Tariff Tax and did not pass it on to us. But if he added the 
cost of the Tariff' to the cost of the goods — and we know as a matter 
of every-day experience that he did — then we paid it. 

Let us get a clear understanding of just what the issue is. I 
gave one item in the last chapter from the records of the U. S. 
Custom House, in 1898, in which the original cost of the goods 
was $89. Upon this our government levied a Tariff Tax of 
$162.64. Now suppose that this goods was imported by 
our distinguished "Merchant Prince", Mr. John Wanamaker, 
of Philadelphia. The question is this: At what price, plus his 
profit, did Mr. Wanamaker sell these goods to his patrons? 
Did he sell them for $89. Or did he sell them for $251.64? 
Which price do you think he charged? If the first, then it 
evidently would have been more profitable for him to have 
made us a present of the goods, but charged us for the Tariff! 

In addition, we know that he added his profit not on the $89, 
but on the $251.64. That is, we pay two profits — one on the 
Goods and the other on the Tariff. And each succeeding pair 
of hands thru which they pass will keep on "pyramiding" the 
profit on the Tariff as well as on the goods. 

Or if John Wanamaker did not bring them over, but bought 
them direct from the importer, how could the importer sell 
them to John Wanamaker for $89? Aside from what he paid 
for these goods, he paid $162.64 tariff on them. But if Mr. 
Wanamaker paid the importer $251.64 for the goods, we know 
that he did not sell them to the public for $89. Nothing more 
ignorant or absurd was ever attempted to be palmed off on the 



Does the ''Foreigner'' Pay the Tariff 27 

credulity of mankind. The proposition that "the foreigner 
pays the tariff" stultifies the intelligence of any man or woman 
who makes it. 

Furthermore, in saying that ''nine-tenths of the duty is paid by 
the foreigners,'^ Mr. Fordney did not realize that if what he said 
were really true, IT WOULD DESTROY His WHOLE SYSTEM 
OF Protection. It would make all his work in building a High 
Tariff Wall useless, and his promise of benefiting the farmers 
and laborers of this country nothing more than empty air. 

Now let me prove this proposition to you. 

Referring to the illustration on page . If the importer 
did not add the cost of the tariff to the cost of the goods,then 
they would sell right here in our markets, not at $800, as the 
artist has indicated, but at only $400 — their foreign cost. In 
other words, they would be sold just as "cheap" to us as they 
would if Mr. Fordney and his associates had not spent nearly 
two years in building their Tariff Wall. 

Therefore, the only way his High Tariff, "the highest in our 
history," will benefit American Producers is by the "foreigner" 
not paying the Tariff Tax. Or, rather — to be more exact — by 
his paying it first, and then ADDING THE COST OF THE TARIFF 
TO THE Cost of the Goods. 

Here, then, is a gigantic contradiction. Either the importer 
does add the cost of the tariff to the cost of the goods — or he 
does not. If he does not,^ then it will yield no "protection." In 
other words, it would yield revenue for the Government, but 
none for Private Pockets. That would make it purely a Reve- 
nue Tariff. But Mr. Fordney has been trying to build a Pro- 
tective Tariff. Heaven knows he has built it high enough to 
make it "protect." Now is he about to be foiled in his purpose 
by having the "foreigner" do the very thing which Fordney 
says he does do? And yet his work is useless unless the high rates 
he has levied on Foreign Goods are actually ADDED TO THEIR 
Cost when sold to American Consumers — thus making pos- 
sible a parallel increase of price in the competing Home Goods. 

On the other hand, if the cost of the tariff is added to the Cost 
of the Foreign Goods — and we know that it is even if Mr. Ford- 
ney does not — in order to make possible a parallel increase of 
price in the competing Home Goods— THEN THE WHOLE CON- 
SUMING Public Must Pay the Tariff on Foreign Goods 
— the higher the tariff rates the more they will have to pay. And 
this same consuming public will have to pay the "Price increased 
by the Tariff" on the ten-fold greater volume of Home Goods. 



Two Streams of Revenue 29 



CHAPTER X. 
Two Streams of Revenue 

Who Gets the Increased Price of the Necessities 
OF Life Which the Tariff Produces? Our artist has 
clearly answered the question on the opposite page. You can 
see the answer with your own eyes. No man on earth can deny 
the facts there pictured. 

As he has shown us, the answer is this: THE INCREASED 
Price of Foreign Goods, Due to the Tariff, Goes 
Directly into the Public Treasury. The Increased 
Price of Home Goods, Due to the Tariff on Foreign 
Goods, Goes into Private Pockets. 

Thus while a Revenue Tariff raises revenue for the Govern- 
ment, a Protective Tariff raises revenue for Private Pockets — 
and for these only. In other words, the Revenue Branch of 
the Tariff goes to the Government. The Protective Branch 
of the Tariff goes into Private Pockets. Not some of it, but 
all of it, goes into Private Pockets. Your mind must be abso- 
lutely satisfied on that point. 

Therefore, when we are considering the matter of raising 
revenue for the support of the Government, we are dealing 
wholly with a Revenue Tariff. It is only when we are planning 
and scheming to raise revenue for the support and enrichment 
of Private Individuals that we give our thought to a Protective 
Tariff. Get this: THE ONE AND ONLY PURPOSE OF A 
Protective Tariff Is To Raise Revenue for Private 
Pockets. 

Now that part of the increased cost of life's necessities, due 
to the Tariff, which goes to the Government, is justified. But 
what is the justification of the part which flows directly into 
private pockets? By what right are we taxed for the support 
and enrichment of private individuals? Unless you can justify 
that, you cannot justify a Protective Tariff. That is what it 
is for — and all that it is for. 

It is safe to say that the most bigoted, partisan and hide- 
bound Protectionist is such only because he does not know that 
the thing for which all his life he has been voting, is simply A 
System of Private Taxation Publicly Enforced. 



30 TARIFF PRIMER 

To consider the merits of Protection we must consider it 
wholly independent of the Government's need for revenue. 
Aye, more than that. If there were no need for public revenue, 
if governments had no expenses whatever to be met; still if 
Protection be right — if certain Producers are * 'entitled" to get 
higher prices for their products than they can get in the Open 
Market — then it would justify levying a tax for the support of 
these private individuals. But would you favor it? 

You would not only vote against it, but you would fight 
against it. You would shoulder a musket and swear that you 
would shed your last drop of blood before such a law should be 
fastened on you and your children. If you did not, you would 
be unworthy to be called an American. And yet that is ex- 
actly what the Protective Branch of the Tariff is for, and all 
that it is for— To TAX ALL THE PEOPLE ON THE NECESSI- 
TIES OF Life in Order to Benefit and Enrich the 
Privileged Few. 

Public taxation of all the people for the support and enrich- 
ment of some of the people belongs to a Despotism. But we 
have perpetuated it in a Republic, and at a rate of taxation 
never dreamed of in an Absolute Monarchy — because of the 
fear of a revolution. There is nothing new about taxing the 
Masses for the enrichment of the Classes. It is as ancient as 
Theft. 

It is simply the old system of taxing and plundering the peo- 
ple for the support of the nobility, royal families and Privileged 
Orders, carried into our modern Twentieth Century Civiliza- 
tion. The man leaning on the vault in which Labor is shovel- 
ing his income from the Tariff represents the Privileged Classes 
of today. For him and his class the whole consuming public 
is again to be taxed, plundered and impoverished by this new 
monstrosity of greed and oppression, known as the Fordney- 
McCumber Tariff. 

Since October 3, 1913, we have had the Underwood Revenue 
Tariff. It yields but little revenue for private pockets — some 
but not much. Practically all that it takes out of the pockets 
of the people, by taxing them on the necessities of life, goes 
into the public treasury. In 1920, about 61% of all our im- 
ports came in on the Free List. The average rates at the cus- 
tom house on the 39% which was taxable was only 16%. Even 
with these low rates it yielded some "protection,'' at least to 
cotton and woolen goods. Furthermore, it raised $325,000,000 
for the Government — more than the new Tariff will yield, un- 



Tico Streams of Revenue 31 

less Trusts and Combines jack up the prices of Home Goods to 
the Tariff Price Level of Foreign Goods. But it poured but 
little revenue into the vaults of the Privileged Classes, for 
whom Protective Tariffs have taxed billions of dollars out of 
our pockets in the past. 

Such a state of things their greed and cupidity could tolerate 
no longer. And now comes along Fordney, McCumber and 
their followers — the agents of that * 'Invisible Government" 
maintained by our mighty rich — who declare that this must 
be changed, that in order for our country to "prosper", a 
Tariff Wall must be built so high that it will yield some revenue 
for the government, but vastly more revenue for our Privileged 
Classes who are always the big contributors to campaign funds. 
The Fordney-McCumber Tariff stands wholly for the second 
stream of wealth which flows into private pockets. It is built 
to multiply a hundred fold the revenue which the Underwood 
Tariff has been yielding for private pockets. It was built 
wholly for that increased price of Home Goods, all of which — 
not some but all— GOES INTO PRIVATE POCKETS. 

No issue could be clearer than this. No fact could be better 
established in any branch of Science than the fact here estab- 
lished — namely, that while the increased price of Foreign Goods, 
due to the Tariff, goes into the Public Treasury, the increased 
price of Home Goods, due to this same Tariff on Foreign Goods, 
Goes into Private Pockets. It could not go to the Gov- 
ernment. The Government has nothing to do with Home Goods 

Your reaction against this fact — the fact that the whole of 
the Protective Branch of the Tariff goes into private pockets, 
and is designed wholly for the enrichment of private individuals 
— depends wholly upon the degree of your personality, wholly 
upon the extent to which you are a real, red-blooded, 100% 
American. If the "yellow streak" of the slave, of the servile, 
the cowardly and the base, is still too strong in your nature; if 
you have not evolved far enough into the realm of independent 
personality; then you will go on voting and working and talking 
for the Protective Branch of the Tariff. 

That is the issue. Now just what is your response? Is it 
the response of a freeman, of a real American, whether man or 
woman — or is it the response of a cowering, abject serf and 
slave? I have done my part as an American citizen by giving 
you the facts, the undeniable facts. The rest lies wholly with 
you. What will be your answer at the polls? For the polls 
are the real test of personality. 



32 TARIFF PRIMER 



CHAPTER XL 
The Higher the Rate— The Less the Revenue 

When I call a man's attention to the fact that there has been 
a tendency to increase the rate with each successive Tariff Bill, 
he says, "Well, the expenses of the Government are increasing 
all the time. And so they would have to raise Tariff rates in 
order to raise more revenue." 

To which I answer: To INCREASE THE TARIFF RATE 
Does Not Increase the Revenue. On the contrary, it 

diminishes it. The whole truth is that the high.er the tariff 
rate — after you get beyond a certain point — the less the revenue 
it raises — for the Government. If the tariff rate is made so 
high as to become prohibitive — as is the case on scores and 
hundreds of articles under the Fordney-McCumber Tariff — ^then 
it yields no revenue at all. That is, it will yield no revenue for 
the Government, Tho IT MAY YIELD HUNDREDS OF MILL- 
IONS FOR Private Pockets. 

And so there is a direct conflict between Protection and 
Revenue. It is a conflict that exists not simply in the minds 
of men. IT Is A FACT OF NATURE. It is grounded deep in 
the industrial order. Each system of Tariff, to the extent that 
it is applied, excludes the other. This seems to be the law: 
To THE Extent that Any Tariff Yields Protection, 
It Does Not Yield Revenue. To the Extent That 
It Yields Revenue, It Does Not Yield Protection. 

Suppose, for example, that the Tariff on a given product in- 
creases its cost to the people one hundred million dollars. Let 
us call this our "Tariff Fund." Now combes the question: 
What portion of this hundred million dollars will go into the 
Public Treasury, and what portion will go into Private Pockets? 

The answer is this: If the Tariff be levied on a product not 
produced in this country, then all of it will go to the Govern- 
ment. But if it be levied upon a foreign product competing 
with a similar home product, THEN THE DISTRIBUTION WILL 
Depend on the Part of the Total Demand Which 
Is Supplied By Each. 

For instance, if three-fourths of the demand for the given 
product be supplied by foreign producers, then $75,000,000 will 



The Higher the Rate — the Less the Revenue 33 

go to the Government, and the remaining $25,000,000 of the 
increased cost of this product to the people — due to the Tariff — 
will go into the pockets of the American Producers of that com- 
modity. If only half of the demand is supplied by the foreign 
product, and the remainder by the competing home product, 
Then One-half of This Tariff Fund Will Go As a 
Bonus to the American Manufacturers and Mine 
Owners. 

But if the tariff rate should be so high as to largely 'prohibit 
the foreign product, so that it supplies only one-fourth of our 
demand for the particular goods, then only TWENTY-FIVE 
Millions out of the One Hundred Millions of the in- 
creased cost to the people — because of the Tariff — would go to 
the Government. The remaining SEVENTY-FIVE MILLION 
Dollars will go into the pockets of the American Producer. 

Go on up with the tariff rate. Make it so high that no For- 
eign Goods of this particular class can come in. Then of the 
hundred millions increased cost of this product to the people, 
because of the Tariff, not a dollar will go to the Government. 
The whole of it will go into private pockets. And Here We 
See One of the Methods At Least By Which Mill- 
ionaires Are Made. 

Thus do high tariff rates, instead of yielding more revenue 
to the Government, yield less. In fact, there are two condi- 
tions under which the Tariff will not yield sufficient revenue to 
the Government. One is to make the rate so low that it is not 
adequate for the quantity of Foreign Goods coming in. The 
other is to make it so high that it shuts out all Foreign Goods, 
thus yielding no revenue at all. And this will be practically 
true of the Tariff Wall just built, the highest in our history, un- 
less Trusts and Gentlemen's Agreements enable our manufac- 
turers to boost the cost of Home Goods to us up to the Tariff 
Price Level of Foreign Goods. 

This fact annihilates another delusion heard on every hand. 
When we call attention to the enormous taxation of the people 
thru the Fordney-McCumber Tariff, some one answers: "But 
we are a patriotic people and are willing to be taxed to support 
our government, and ought to be taxed to support it." 

To which I answer: Quite true. As patriotic citizens we 
ought to be willing to be taxed for the support of the Govern- 
ment, wisely and economically administered. But this does 
not all go to the Government — not half of it, or even a fourth 
of it goes to the Government. In fact, about nine-tenths of 



34 TARIFF PRIMER 

the hundreds of millions of dollars which the Fordney-McCum- 
ber Tariff will tax out of the pockets of the American people 
will go, not to the support of the Government, but to the sup- 
port and further enrichment of those whom the Protective 
Tariffs of the past have already made rich. 

These statements as to the fractional part of the millions the 
Fordney-McCumber Tariff will filch from our pockets that the 
Government will get, are far from being fanciful. They 
are based on the fact that, according to Mr. Fordney himself, 
only 8% of all that we consume in this country is imported from 
abroad. The remaining 92% of our consumption we produce 
directly for ourselves. Therefore, about nine-tenths of the in- 
creased cost of the necessities of life to us, because of a High 
Tariif Wall, goes into the pockets of our Tariff Barons — one 
dollar for the Government, nine for them! No wonder they 
are willing to contribute so liberally towards the election of the 
men who made these "blessings" of Protection possible /or them. 

In other words — looking at the grand total of the loot to be 
gathered in by this colossal Scheme of Plunder — the Fordney- 
McCumber Tariff, in order to raise some $300,000,000 for the 
Government, will take from the people every year about ten 
times this amount, or $3,000,000,000! Of this three billions 
extorted from the people in the increased cost of the necessities 
of life, only about $300,000,000 will go to the Government. 
The remaining $2,700,000,000 will go into Private Pockets. 
And even these figures are far below those made by the experts 
of the Treasury. Nothing more heinous and damnable than 
that, in principle, has ever been enacted in the history of the 
world. 

Thus are we being plundered, oppressed and impoverished by 
the inordinate and extortionate rates of the Fordney-McCum- 
ber Tariff — taxed on practically everything we eat, drink or 
wear — not for the support of the Government, But FOR THE 
Support and Enrichment of Private Individuals. 



Who Gets It — Employees or Employers? 35 



CHAPTER XII. 
Who Gets It— Empl oyees or Employers? 

We have thus far established four great and cardinal truths, 
four vital facts: 

First: that a tariff "protects'' by increasing the cost of those 
material products which mankind must consume in 
order to live. 
Second: that this increased cost is paid by the consumers of 

these products. 
Third: that the increased cost of Foreign Goods, due to the 

Tariff, goes into the Public Treasury. 
Fourth: that the increased cost of Home Goods, due to the 
Tariff on Foreign Goods, goes into Private Pockets. 

In these four propositions we have a basis for our reasoning 
as definite and valid as any proposition in Geometry, as con- 
crete and tangible as any rule of Arithmetic. 

The increased cost of Home Goods — like the increased cost 
of Foreign Goods — is paid wholly by Home Consumers and 
goes into Private Pockets. That much is certain. Now comes 
the question: Whose pockets? In other words: Who gets it? 

That contented and prosperous-looking gentleman our artist 
has sketched for us, and into whose large vault labor is shovel- 
ing the gold which the Tariff has brought him — just who is he? 
Is he a farmer, blacksmith, banker, manufacturer, coal miner, 
section hand? Just who is he? 

Perhaps we can get at the matter more directly by asking: 
Whom does he represent? Whom do you think he represents? 
This is your problem just as much as it is mine. Think it out 
for yourself. Do you think our artist designed him to repre- 
sent labor — the tens of millions of American people who toil 
and serve for wages and salaries? Or does he represent the 
employers of labor? He cannot possibly represent both. There- 
fore, he must represent either the Employing Classes or the 
Working Classes: Which is it? 

If he represents the Employing Class, then the next question 
is: Does he represent all who are the employers of labor, or only 
certain groups of them? And if the latter, then which group 
of employers does he represent? 



36 TARIFF PRIMER 

Wealth consists of food, clothing, shelter, luxuries and all 
other material things which satisfy human desires and minister 
to human needs. In reference to all these things, and to all 
other material products which go to make up what we call "the 
necessities of life," all mankind are Consumers. 

But while all mankind are the Consumers of wealth, and while 
all forms of wealth are the products of human toil, not all, or 
even half, of mankind are specifically engaged in the production 
of Wealth. In other words, while the whole of our 110,000,000 
people are Consumers, they are not all Producers. 

In reference to the actual production of wealth, the American 
people — and all other peoples — can be divided into two distinct 
classes: Producers and Non-Producers. I am not saying that 
those here classed as Non-Producers — do not earn the food, 
clothing, shelter, comforts and luxuries which they consume. 
I am simply saying that they do not produce them. All are 
Consumers of wealth; only a comparatively few are Producers 
of wealth. 

The Non-Producers of wealth fall into two classes: (1) 
Those engaged in various forms of professional service — ^law- 
yers, doctors, editors, teachers, preachers, writers, lecturers, 
musicians, servants, entertainers, nurses, etc. (2) Those not 
engaged in any "gainful occupation," but living on fixed in- 
comes derived from various sources. The Non-Producers of 
wealth constitute over half of our 110,000,000 people. So far 
as the necessities of life are concerned, they are not Producers 
but Consumers. Therefore, the Fordney-McCumber Tariff 
cannot possibly be of any direct benefit to them. They have 
no products whose price it can increase. To them it means not 
"protection" but plunder, not a blessing but a burden, by in- 
creasing the cost of the necessities of life; thus reducing their 
salaries BY REDUCING THEIR PURCHASING POWER. 

Of the four classes into which Wealth Producers can be logic- 
ally divided, the millions engaged in merchandising, banking, 
and general commerce — including both Employers and Em- 
ployees; and the millions more engaged in railroading and trans- 
portation, from the President of the company down, cannot 
possibly receive any direct benefit from Mr. Fordney's High 
Tariff. 

There are two reasons why it cannot benefit them. First, 
because the tendency and purpose of all High Tariff Walls is 



Who Gets It — Employees or Employers? 37 

to obstruct and prevent trade, while their business is trade, com- 
merce — Exchange. Second, because they produce no goods 
whose price the tariff enhances. It increases the price of all 
the goods and products which they must sell and transport to 
the people. To that extent it diminishes the amount of goods 
and products the people will, or can, consume — hence it dimin- 
ishes the volume of their sales and so of the goods to be trans- 
ported. 

Furthermore, since it increases the cost of the necessities of 
life which these millions of our people must consume, both em- 
ployees and employers, the Fordney-McCumber Tariff means 
to them also only taxation and plunder. 

A very little reflection of the subject ought to show any in- 
telligent man or woman that the direct benefits of High Tariffs 
are necessarily limited exclusively to those WHO PRODUCE 
Goods to Sell. It must act To the Detriment of 
Those Who Have Goods to Buy. 

This makes it necessary to divide the 25,000,000 of our people 
— according to the census of 1920 — directly engaged in the pro- 
duction of agricultural, manufacturing, forest and mineral 
products into two classes: Employers and Employees. 

While the millions of workers, of employees, in these two 
classes of Wealth Producers are directly engaged in the produc- 
tion of wealth, THEY HAVE NO WEALTH TO SELL. They 
have it to BUY. The only thing they have to sell is their labor 
—which is not sold in the GOODS MARKET but in the LABOR 
Market. And for the Labor Market there are no Tariff Walls. 
They are built exclusively for the GOODS MARKET. 

Therefore, in reference even to the thousands of forms of 
wealth which their own brain and hand have fashioned they 
are not sellers but buyers. The products of their toil pass at 
once out of their hands into the hands of their employers. 
Hence, commercially speaking, they are not Producers but Con- 
sumers — consumers even of the very things which they them- 
selves have produced. 

Thus, the direct beneficiaries of a Tariff Wall are limited 
wholly to the Employing Class; to the owners of the finished 
products of labor — and therefore vitally concerned in their 
Selling Price. To increase the selling price for their com- 
modities is the purpose, and the only purpose, for which Tariff 
Walls in all lands are built. 

By thus limiting the field of the possible direct benefits of a 
Tariff Wall wholly to the above Employing Classes, we have 



38 TARIFF PRIMER 

reduced the total number of its beneficiaries, even from the 
25,000,000 with which we started, down to something like 
5,000,000 — about 5% of the total population. The remaining 
105,000,000 of the American people are not its beneficiaries but 
its victims. And it is these five million Employers whom the 
prosperous-looking gentleman at the vault represents. 

It ought to be observed^ in passing, that while President 
Harding vetoed the Soldier Bonus Bill, because he said it was 
taxing 110,000,000 people for the benefit of about five millions, 
he did not veto the Tariff Bill, which will tax these same 110,- 
000,000 American people for the benefit and enrichment of far 
less than five million employers. 

The Soldier Bonus would have been no more of a "raid" on 
the pockets of the people than is the Tariff Bonus. The num- 
ber to be benefited was far greater, and the amount to be taken 
out of the pockets of the people would have been vastly less in 
the end. Surely these Tariff Barons — who for decades have 
been fattening at the Public Crib — have no such claim on our 
gratitude, our admiration and our generosity as have the heroes 
and veterans of the World War. 

These veterans of the late war, whose valor and indomitable 
courage in battle astounded the world — under the Tariff Bonus 
just passed — are now to be taxed, and at extortionate rates, 
on all the necessities of life — on practically everything they and 
their dependents eat, drink and wear — in order to pay tribute to 
the ruthless greed of the Profiteers who made colossal fortunes 
in the war for Democracy while they were fighting in France. 

Returning to the main argument, allow me to repeat that it 
is not labor, but the employers of labor, into whose pockets 
flows that huge stream of wealth arising from the increased 
price of Home Goods, due to a Tariff on Foreign Goods. But 
this does not include any of the employers of labor in the first 
class of Non-Producers — those engaged in Professional Occu- 
pations. Neither does it include any of the employers of labor 
engaged in railroading. Nor the employers of labor engaged 
in merchandising, banking, shipping and general commerce. 

The benefits of the Tariff must necessarily be limited wholly 
to those employers engaged in Farming, Manufacturing, Min- 
ing, Lumbering, Fisheries, etc. In other words, the "blessings" 
of a Protective Tariff are limited exclusively to those who em- 
ploy labor for the direct production of wealth — ^And WHO 
Are the Owners of the Finished Products of their 
Employees. 



Who Gets It — Employees or Employers? 39 

Furthermore, employers of labor engaged in agriculture, as 
will be shown later on, are not the beneficiaries but the dupes 
of "Protection." Unfortunately for themselves, for the agri- 
cultural population, and for the whole consuming public they 
think they are benefited — and so by their votes have perpetu- 
ated this colossal Scheme of Plunder. No definition of graft 
and plunder can be given which will not include that stream of 
wealth, flowing into Private pockets, which High Tariffs are 
designed to make possible. 

From this analysis we realize that only about one in twenty 
of our people, or of any people, can possibly be benefited and 
enriched by a Protective Tariff. The remaining 105,000,000, 
and more, of our total population, are not its beneficiaries but 
its victims. They are not the Producers but the Consumers 
of the products whose prices the Tariff is designed to increase. 

So far as the Tariff is concerned the interests of Producers 
and Consumers are in direct conflict. 

It Is Mathematically Impossible for Any Law, or 
Economic Policy, to Increase the SELLING PRICE 
FOR THE Producers of Any Given Product, Without 
At the Same Time, and to the Same Extent, Increas- 
ing THE COST PRICE TO its CONSUMERS. 

The Consumer must pay what the Producer gets. There- 
fore, any law directly to the benefit of the one, by increasing the 
price of his commodities, must be to the detriment of the other. 
Here, then, is a fundamental principle as true and universal as 
any rule of Arithmetic. It holds everywhere, in all lands and 
climes. And upon this eternal truth of economics we shall base, 
and have based, all our reasoning. 

What utter al3surdity, then, is the claim of Messrs. Fordney 
and McCumber that by building the highest Tariff Wall in 
our history they will benefit alike both Producers and Con- 
sumers. As well say that in sawing a board in two pieces, you 
can increase the length of one piece without diminishing the 
length of the other piece; that one child on the end of a see-saw 
can go up without the other going down; that matter can 
put in one place without being taken from another. 

These absurd propositions are no more preposterous, no 
more irrational and contradictory, than the claim of Protec- 
tionists that they can add hundreds of millions of dollars to the 
profits of the Manufacturers without taking them from the pur- 
chasers of their goods. In other words, that they can increase 
the Selling Price for the Producer without increasing the 
Cost Price to the Consumers of his products. 



40 TARIFF PRIMER 



CHAPTER XIII. 
Does the Tariff Protect or Plunder Labor? 

A little reflection on the meaning and significance of the pic- 
ture on the opposite page cannot fail to result in a most start- 
ling surprise. In fact, it quite upsets all our ideas and under- 
standing in reference to the Tariff. We have been told from 
childhood that the chief reason — and practically the only rea- 
son — for building our American Tariff Wall is to "protect" 
American Labor from the competition of the "cheap, pauper 
laborers" of Europe. 

Of course the very first requirement in order to do this is 
to keep them out. But when we look at this picture we see that 
instead of keeping them out, instead of protecting our own 
wage earners right here at home from their competition, the 
Tariff Wall is so built that they can pass right thru. 

That Tariff Wall keeps Foreign Goods out, or can keep them 
out. Why? Because they would compete with the goods of 
our own manufacturers — the Employing Class. But the 
hundreds of thousands whose hands produce these Foreign 
Goods — well, that is different! They can come in — and have 
come in by the millions. The more that come in the cheaper 
our manufacturers can get their labor. And so we see them 
coming thru that mighty Tariff Wall just as if it had been built 
as a Royal Arch to welcome them. 

Even passing the point of foreign immigration, can a 
Tariff benefit labor? I pause for a reply. Ask your Congress- 
man, your Senator — ask anybody. And if anybody can tell 
you how, please be good enough to send the answer to me. 

The increased cost of Home Goods, due to the Tariff on For- 
eign Goods, goes into Private Pockets. But what has the 
laborer to sell upon which there is a Tariff to increase its price? 
The only thing the wage earners and day laborers of America, 
or of any other country, have to sell is their labor. BUT THERE 
Is No Tariff on Labor. Labor is on the Free List. The 
Tariff is on the products of labor. But the products of labor, 
alas, do not belong to the laborers. 

The Products of Labor Pass Out of the Hands 
THAT Produce Them Into the Hands of Their Em- 



Does the Tariff Protect or Plunder Labor? 41 

PLOYERS. And SO it is not the employee, but the employer, 
who has the products to sell which the Tariff increases — and 
often doubles — in price. Again we see that it is not the em- 
ployees, the wage earners, but the employers — THE OWNERS 
OF THE Finished Products— who can possibly be benefited 
and enriched by a Protective Tariff. 

Tariff Walls in all lands are for the exclusive benefit and 
"protection" of the Goods Market — the market in which The 
Interests sell all their products. The only thing which labor 
has to protect its market are Labor Unions. And so it is not 
the Wages of Labor But the Cost of Goods that the 
Tariff is designed to increase, or can increase. 

In other words. The System is this — Free Trade for Labor: 
Protection for the products of labor. What is true of labor in 
this country under Protective Tariffs is true in every other. 
Protection is nothing less than that pernicious and loathsome 
thing, called Class Legislation. It is legislation for the-benefit 
and enrichment of certain groups of the Employing Class, at 
the expense and to the detriment .of the Working Classes. Such 
a "policy" does not belong to Democracies but to Despotisms. 

No Tariff Wall, tho it tower to the skies, can possibly benefit 
the millions of wage earners who toil on farms and in forests, 
factories, quarries, fisheries and mines. Why not? . Because 
they have none of the things which their own toil produces to 
sell. They do not own them and never get possession of them. 
In fact, They Have Them to Buy. Therefore, every in- 
crease which the Tariff makes in the cost of the products of 
labor, by so much decreases the wages EVEN OF THE LABOR- 
ERS Who Produce Them. 

Protectionists assure us that the manufacturer, in return for 
all these manifold opportunities for price-fixing offered him by 
the Fordney-McCumber Tariff — out of the gratitude of his lov- 
ing heart — will voluntarily increase the wages of his employees, 
at the same time that he is increasing the price of his product to 
the consuming public. 

Even if the manufacturers of this country should be so moved 
by the unparalleled generosity of Fordney & McCumber in 
taking money out of the pockets of the people to go into their 
pockets, as to voluntarily increase the wages of their employees, 
what are the chances that they would increase wages as much 
above the NORMAL MARKET PRICE OF Labor as the Tariff 
enabled them to increase the price of their products above THE 
Normal Market Price? What are the chances that they 



42 TARIFF PRIMER 

will do this? A thousand to one that they will not. And so 
labor will be the loser. The increase in their wages would not 
be equal to the increase in their cost of living! 

I have seen our coal miners in Pennsylvania again and again 
strike for higher wages, for increased pay — and get it. But 
they had to buy in the Company Store. And so when they 
settled the strike and returned to work, they found that prices 
in the Company Store had been increased even more than their 
wages. And that is the Tariff Game. We all must buy at the 
"Company Store." They set the prices. We must pay them 
— or freeze and starve! 

In reference to all these fanciful and delusive claims and 
"arguments" about employers voluntarily raising wages, there 
is one important distinction to be noted: While the Tariff en- 
ables its beneficiaries to pay higher wages — far higher — it does 
not compel them to pay higher wages. And it is that distinc- 
tion between "enabling" to do this, and "compelling" to do 
this, which made it possible for Carnegie and scores of other 
"protected" manufacturers to retire from the business with 
their millions, some of them with their tens of millions, and a 
few of them with their hundreds of millions. That was what 
did it. 

Nor can a Protective Tariff increase the amount of employ- 
ment. It never gave labor a job, and never will — except that 
indicated in the picture of shoveling the gold into the Tariff 
Baron's vaults. It can change the direction of the employment, 
but it cannot increase the amount of employment. How could it? 

Does increasing the price of woolen goods and cotton goods 
increase or diminish the amount of these goods which the people 
will buy? And so of all other goods and products. Answer the 
question for yourself. The only result of increasing the cost of 
all these things is to create a "buyers' strike" among the people. 
Thus does the Tariff diminish the demand for labor instead of 
increasing it. There is less employment instead of more. 

Furthermore, a Protective Tariff reduces the wages and sal- 
aries of all employees in all lines of industry. How do they do 
this? By Reducing Their Purchasing Power. When 
President Harding on Sept. 21, 1922, signed the Fordney-Mc- 
Cumber Tariff Bill, he automatically reduced the wages and 
salaries of every man and woman working in office, store, forest, 
factory or mine, and of the whole agricultural population BY 
Reducing the Amount of the Necessities of Life 
Which Their Incomes Will Purchase. 



Does the Tariff Protect or Plunder Labor? 43 

No man or woman who will really think upon the subject 
can deny this proposition. In what a confused and pitiful 
situation, then, is the mind of American Labor. A proposal 
to reduce wages in any industry 5% — or 10% at the most — 
causes labor to go on a strike. They make the very just claim 
that they have the right to a living wage. And they have. 
Every toiler should have a living wage — AND SOMETHING 
More. 

On the other hand, apparently scores of labor unions peti- 
tioned Congress to hasten the enactment of the present mon- 
strosity of oppression and plunder, this embodiment into law 
of the unbridled greed and rapacity of the race, known as the 
Fordney-McCumber Tariff. Thus does labor appeal to force 
against a proposition to reduce wages even 5%, but it eagerly 
votes for a proposition which will reduce its wages in many 
cases 10 times this amount— BY REDUCING THEIR PUR- 
CHASING Power. 

When all the facts in the case have been presented to Ameri- 
can Labor as to the real meaning of High Tariffs to all who toil, 
I have the utmost confidence in the conclusion which the tens 
of millions of employees, both men and women, will reach and 
in the results which will follow at the polls. 

Nevertheless, the fact largely remains that this colossal 
scheme of compelling labor to sell under Free Trade and buy 
back under Protection — so cunningly devised to plunder and 
impoverish all who work for salary or wages — American labor 
has supported by its vote decade after decade. In the hands 
of labor there is the greatest weapon that Civilization can give 
— the Ballot. Whether or not the workers of America will 
continue to vote for the enrichment of the few thru the taxation 
and enslavement of themselves and their families remains to 
be seen. 



44 TARIFF PRIMER 



CHAPTER XIV. 
The Farmer and the Manufacturer 

Having eliminated all possibility of day laborers, or any 
other classes of employees, being the possible beneficiaries of the 
gigantic piece of Class Legislation just enacted at Washington, 
let us now turn to the five million employers of labor who are 
possible beneficiaries of the Tariff, and see what are the chances 
of either farm owners or farm tenants to be among the Favored 
Few into whose pockets the Tariff pours its golden stream. 

Between farmers and manufacturers, so far as the Tariff is 
concerned, there is not unity but conflict of interest. It is true 
that the products of both the farmer and the manufacturer are 
now highly ''protected." Up until 1883, but few products of 
the farm were favored by Tariffs. The great revolt of the 
farmers of the West against the oppression and plunder of High 
Tariffs had its beginning about that time. 

Then the manufacturers of the East got a brilliant idea: 
"Why not give the farmer a tariff on all his products? Of 
course it will not benefit him, but he will think that it does. 
His vote will benefit and perpetuate our system." Then it was 
that taxes were levied on practically all farm products. In the 
Tariff of 1883, "protective" rates were levied on wheat, oats, 
barley, hay, rice, corn, potatoes, hogs, cattle, flour, onions, 
bacon and ham. And that "policy" has been continued ever 
since. The rates in the Fordney-McCumber Tariff on the 
Farm Products are as high, and in some few instances higher, 
than those of any previous "protective" measure. 

All the wealth of the world comes out of the ground. Of the 
four classes of Wealth Producers engaged in extracting wealth 
from the earth — farmers, miners, lumberman and fishermen — 
the farmer takes the lead. He produces all the essential food 
products which keep humanity from starving, and all the raw 
materials for the fabrics which clothe them. Nevertheless, 
while the farmer thus produces the raw materials which feed 
and clothe the world, nine-tenths of all that he himself con- 
sumes he must buy. 

True it is he produces the raw materials of much that he 
consumes. But even if he produced them all, their manu- 



The Farmer and the Manufacturer 45 

factured form he must buy. All his clothing for himself and 
family, all his furniture and fixtures, all the materials for his 
house, all his harness, machinery, chemicals, oils and paints; 
all his nails, chains, fencing and other hardware — all these mul- 
titudinous things he must buy. Even a large part of all the 
foods for his live stock he must use in manufactured form. 
These, too, he must buy. 

In short, aside from milk, butter, eggs, garden products and 
a portion of their meat, OUR 40,000,000 PEOPLE ON AMERI- 
CAN Farms Must Buy Practically As Much of All 
That They Consume As Do the Dwellers in Towns 
AND Cities. And they must buy from manufacturers. In 
fact, it is estimated that they buy 46% of all goods manufac- 
tured in this country. Now all these manufactured goods and 
products will be increased in price at an appalling rate by the 
Fordney-McCumber Tariff. Thus are the people of the coun- 
try, no less than the people of the city, the objects of the extor- 
tions and plunder of Protective Tariffs. It is out of their pockets 
that must come the billions of tribute which Protection pours 
into the pockets of our Tariff Barons. 

Protectionists claim that while farmers are the Consumers of 
certain products, they are also the Producers of other products. 
Therefore, that what they lose by the increased cost which the 
Tariff adds to the things they must buy, will be fully made up 
to them in the increased price which it will give them for the 
things they have to sell. 

It is quite true that they are both Consumers and Producers. 
But what are the chances, the probabilities — or even the possi- 
bilities — that the Tariff will increase the price of the things 
they have to sell as much as it will increase the cost of the 
things they have to buy? Well, the chances are at least a 
thousand to one that farmers will not get "equal protection," 
or anything approaching equal benefits, with the manufac- 
turers. 

In the first place, the rates on his products — with the possible 
exception on raw wool and an occasional item like nuts, citrus 
fruits, etc. — are not nearly so high as they are on the hardware, 
woolen goods, cotton goods, clothing, women's and children's 
dress goods, and hundreds of things which the farmer must buy. 
Besides, but few farmers produce either wool or citrus fruits. 
And so the market in which the farmer buys is more highly "pro- 
tected" by tariff rates than the market in which he sells. That 
is the first jolt. 



46 TARIFF PRIMER 

It is a mathematical impossibility for any law to give an 
equal increase of price to the products of both the farm and the 
factory. All the chances are against it — and the farmer stands 
to lose. To levy THE SAME TARIFF Rate on the products 
of both farmers and manufacturers will not make the same in- 
crease of price to the public possible. 

For example, a tariff rate of 100% on all products would en- 
able the producer of most manufactured products to increase 
their price fully 100%. But it would not enable the Producer 
of certain agricultural products to increase his price even 50%. 
In a big majority of cases it would not enable him to increase 
his price at all. 

Therefore, even if it were true that farm products are "pro- 
tected" equally with the products of the factory — which they 
are not — what would be gained by our agricultural classes? 
Their only hope would be to come out even. And the chances 
are a million to one that they would not. THE ONLY WAY 
THE People of Any Class Can Be Benefited By a 
Tariff Wall Is for It to Increase the Price of the 
Things they Have TO SEZX, Without Increasing the 
Cost of the Things They Have TO BUY. 

But since the price of the hundreds and thousands of things 
the farmer has to buy were given higher rates, and will be in- 
creased vastly more in price by the Tariff, than his own pro- 
ducts can be, again we see why the American farmer always 
has lost, and always will lose, by Protective Tariffs. 

On June 11, 1909, Senator Cummins of Iowa — ^who voted 
against the Fordney-McCumber Tariff — said on the floor of the 
Senate: "I know that my friend from North Dakota (Mr. Mc- 
Cumber) does not agree with me in respect to these things, but 
I do not believe that we in Iowa receive any direct benefit for the 
400,000,000 bushels of corn that we raise every year; I do not 
believe that we receive any direct benefit from the 8,000,000 or 
10,000,000 hogs that we market every year; I do not believe 
that of the $700,000,000 of agricultural products that we pour 
every year into the channels of trade protection advanced the 

prices of a tithe of them We will supply this year the 

people of the United States and of the world with a product 
that will surpass in value $700,000,000 and IT Is IDLE FOR 
Even an Enthusiast to Assert that the Price of 
These Products Is Directly Affected By the Pro- 
tective Tariff." 



The Farmer and the Manufacturer 47 

Therefore, no Tariff however high, can benefit the 40,000,000 
of our agricultural population. They are the victims of its 
ravenous cupidity and greed — ^not its beneficiaries. When the 
American farmer comes to realize this apalling truth, this un- 
deniable fact, he will cease to be any longer the dupe of the de- 
lusive hope of getting prosperity out of a system designed for 
his own plunder. 

I commend to the farmers of our great country the foresight 
and wisdom of the following extract from an article in the 
"Western Farmer" of Spokane, appearing soon after the enact- 
ment of the Underwood Tariff, Oct. 8, 1913. It was written by 
the late C. B. Kegley, Master of the Washington State Grange, 
and a man with a vision. He said : 

"As a system, Protection is doomed. If we, the farmers, 
stand for it, we shall lose our share, and the public believing 
that it has secured relief from the burden of living cost, will 
stop there — causing whatever of loss occurs to fall all upon the 
farmer. 

"Consequently, the business-like course open is for the 
farmers to fight, not to continue the system, but to smash it. 
Fight, not to hold his own questionable benefits of the Tariff on 
grain and live stock and wool, BUT TO STRIP THE COATS OF 
Privilege off the Back of Every Business Engaged 
IN Supplying the Necessaries of Life." 



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The Farmer As an Exporter 49 



CHAPTER XV. 

The Farmer as an Exporter 

On the opposite page is a table showing the simultaneous rise 
and fall of the price of wheat in Chicago, Minneapolis, Duluth, 
Winnipeg, Toledo, Kansas City and Liverpool. The relative 
prices are given for the first twenty days of July, 1922. The 
figures were furnished me by the Produce Exchange of New 
York. The Liverpool prices are made according to the rate of 
exchange for each day, and so are exact. Study this table, 
think out its meaning, and you will know vastly more about the 
Law of the Market Price than you ever conceived of before. I 
submit it to the thought and intelligence of my readers without 
further comment. And in this we have the proper atmosphere 
for the opening of this chapter. 

There are two general reasons why even the highest Pro- 
tective Tariff cannot increase the price of things the farmer has 
to sell to the same extent that it increases the price of the manu- 
factured products he has to buy — even if it increases them at 
all. In fact, there are two general reasons why it will not in- 
crease the selling price of his products. 

The first is the undeniable fact that our farmers, as a class, 
are our greatest exporters, producing nearly one-half of our 
total exports to foreign lands. Therefore, they must sell in 
the Open Market of the world, with prices fixed at Liverpool, 
England, an international market — the international market 
of the world for farm products. They must sell in competition 
with the farm products of all the nations of the earth. No 
Tariff Wall can keep their competitors out of that market. IT 
Is THE Price of Farm Products in that Interna- 
tional Market Which Determines their Price in 
Our Own Market. 

Our total exports for 1920 were $8,080,480,821. This is the 
largest aggregation of exports sent out from its shores by any 
country on earth. Of these exports the products of the farm 
alone amounted to $3,230,101,784. This is approximately 40% 
of the total. If to this we add the raw materials which go 
directly into manufactured products for export, and the price 
of which in the international market necessarily react on the 



50 TARIFF PRIMER 

price of the farm products at home, we then would have over 
half of our exports supplied by our agricultural population. 
Of breadstuffs alone we exported $1,079,107,701. The fol- 
lowing table shows something of the farmer's stake abroad. 

IMPORTS EXPORTS 

Barley (none) $ 27,165.189 

Corn $ 9,296,991 26,543,681 

Cotton 138,743,702 1,136,408,916 

Eggs 617,909 13,569,144 

Meat and Dairy Products 64,274,457 544,074,060 

Oats 6,549,111 12,338,104 

Oat Meal & Rolled Oats (none) 3,891,346 

Rice 14,085,728 37,469,175 

Rye (none) 122,239,537 

Tar, Pitch & Turpentine (none) 34,503,389 

Tobacco 81,630,011 245,532,069 

Wheat 75,359,220 596,975,396 

Wheat-Flour 3,669,300 224,472,448 

It was said over and over again by Mr. Fordney and his fol- 
lowers that they propose to protect and defend the American 
farmer in his Home Market and shield him from the "dumping" 
of the farm products of the world into his Home Market. From 
all this we would infer that the farmers of all the rest of the 
earth are eager for the chance to pounce upon our markets and 
"unload "their wheat, corn, oats and flour on us. In alarm- 
ing tones they tell us that with the very first opportunity given, 
the farmers of other countries would so completely "flood" our 
markets as to supply all our wants in food products, and in all 
other products now furnished us by our own farmers — thus 
leaving our own farmers without a market! 

Since 1913, however, there has been a very low tariff rate 
even on the "protected" products of the farm, under the Under- 
wood Tariff; while wheat, flour, com, hogs, cattle, bacon and 
ham have been on the Free List — ^no tariff on them at all. 

Here, then was their opportunity. For eight years our ports 
were wide open for the farm products of the world to come in 
and "flood" our markets. Did they come in? Did those 
crushing and appalling things happen which Messrs. Fordney 
and McCumber said would happen? They did not. Suppose 
that the thing they prophesied had actually happened, suppose 
that the whole of the Canadian export, instead of going to Liver- 
pool, had been unloaded on the mills at Minneapolis and else- 
where, and ground into flour by American labor. 

Would anything serious have resulted in the price of Ameri- 
can wheat? Nothing that any rational mind can picture. 



The Farmer As an Exporter 51 

Why? Because the Liverpool price is always higher than our 
own market price. The more of our wheat which Canadian 
wheat "displaced" at Minneapolis, the more wheat we could 
have exported to Liverpool, at the higher price. Over there is 
an unlimited demand. For instance, our combined exports of 
wheat for 1919 and 1920 was greater than the total Canadian 
production of wheat. We exported in those two years, 507,- 
266,128 bushels. Canada's total production for those two 
years was only 456,449,700 bushels. Our total production for 
those two years was 1,855,703,000 bushels. 

With that Liverpool market calling loudly for the excess pro- 
ductions of both countries, what does it matter as to whether 
Canada ships her wheat to Liverpool, and so "displaces" so 
much of our wheat there^ or ships it to Minneapolis, thus re- 
leasing so much more of our wheat for the Liverpool market, 
averaging a dollar a bushel more than is paid at Minneapolis. 

We must remember also that the imports and exports in 1920 
occurred under this same so-called "free trade" Underwood 
Tariff, and before the farmers Emergency Tariff was enacted. 
Furthermore, since its enactment, no man can furnish any 
valid evidence to show that it raised the general level of the 
price of farm products one single penny. 

The builders of the Fordney-McCumber Tariff Wall would 
have us believe that this is the first time that "protection" has 
been given to the products of the farm. The truth is, as stated be- 
fore, that the protection of farm products began as far back as 
1883. On wheat it put a tariff rate of 20 cents a bushel. The Mc- 
Kinley Tariff reduced it to 15 cents, the Cleveland Tariff raised it 
to 20 cents, the Dingley increased it to 25 cents, and the Payne- 
Aldrich Tariff continued this rate. 

The Underwood Tariff put wheat and a few other farm pro- 
ducts on the Free List. And yet the excess of farm exports 
over imports continued in approximately the same proportion 
as when they were under High Tariffs. Nor is that all. The 
prices of farm products, like the wages of labor, were higher 
under the Underwood Revenue Tariff than ever before in our 
history. 

There can be but one conclusion, and that conclusion is that 
the American Farmer, like the American Laborer, sells his pro- 
duct in an Open Market and buys back the necessities of life 
in a Closed Market — sells under Free Trade: buys under Pro- 
tection. If that would not impoverish and bankrupt any class 
of people on earth, I would like to know what would. 



Can the Farmers Form a Trust? 53 



CHAPTER XVI. 
Can the Farmers Form a Trust? 

In reply to the undeniable fact that the American farmer 
produces an excess of products over the requirements of the 
Home Market, and is an exporter, it may be said that, among 
other manufacturers, the United States Steel Corporation is 
also an exporter, selling its product in every country on earth. 
Quite true. But this gigantic corporation is a Trust. And 
back of it also is a monopoly of the raw materials in the earth 
from which all iron and steel are made. It is the largest Indus- 
trial Combine on earth, overshadowing even the Federal Gov- 
ernment at Washington. Hence it is in position to take full 
advantage of a Tariff Wall. 

It is the fact of its being a Trust which enables it to sell in 
the Home Market — to the farmers and the rest of us — at 
monopolistic prices, and then to sell to the people of other nations 
at the Open Market price — often at only about half of what is 
charged here for the same thing. Charles M. Schwab once 
admitted that when steel rails were selling in this country at 
$28 a ton, they were selling in Europe at $20 a ton. And the 
same fact holds of scores of "protected" products. THEY 
Are Sold Cheaper Abroad Than at Home. 

This is the impregnable position of that huge Industrial 
Octopus, called Monopoly, which our artist has sketched for 
us on the opposite page. The Tariff shields him from foreign 
competition, the Trust shields him from home competition — 
and his Monopoly is complete. 

But the farmers of this country, whether for good or ill, can- 
not form a Trust. They are too numerous. And they are too 
poor. The railroad and the Trust have seen to that. THEY 
Compete With Each Other. This competition they can- 
not prevent. Manufacturers and mine monopolists can pre- 
vent competition among themselves by forming Trusts — and 
thus are able to keep prices up and take full advantage of the 
"protection" given them. 

So far as a general statement can be made as to the law deter- 
mining which Producers can be benefited by High Tariffs and 
which cannot, it would seem to be this: ONLY THOSE PRO- 



3 



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Can the Farmers Form a Trust? 55 

DUCERS OF Wealth Who Are Able to so Combine 
Their Interests As to Form Pools, Trusts and Gen- 
tlemen's Agreements— Thus Preventing Competi- 
tion Among Themselves— Can Be Benefited to 
Any Appreciable Extent By a Protective Tariff. 
Thus are Trusts and Monopolies indispensable to Producers 
in order to get the whole of that increased cost of Home Goods 
which the Tariff on Foreign Goods makes possible. But the 
farmers cannot form a Trust and so cannot be benefited to any 
appreciable extent — if at all — by High Tariffs. But while 
Protective Tariffs cannot possibly be of any general benefit to 
our farming population, they can be, and have been, the cause of 

Tremendous Detriment and Financial Loss to Them. 
Practically all economists are in absolute agreement on that 
point. 

They are a detriment to the farmer in two ways: First, the 
Tariff always has increased, and always will increase, the cost 
of the manufactured products he has to buy far more than it 
will increase the price of the things he has to sell — even assuming 
that it does increase them at all. That makes a continuous 
financial drain on the farming population of hundreds of mill- 
ions annually. It has been going on for decades and genera- 
tions, and has taken its billions out of the pockets of the Ameri- 
can farmer. 

Therefore, when the Underwood Revenue Tariff put wheat, 
wool and other farm products, on the Free List, it took abso- 
lutely nothing from the farmer — except the delusion that he 
was being prospered by the very thing that was plundering him! 

On the other hand, when the Underwood Revenue Tariff put 
agricultural machinery, binder twine, cotton bagging, oils and 
scores of other products on the Free List, and cut in half the 
tariff rates on woolen goods, cotton goods, clothing, women's and 
children's dress goods, and all the other things the farmer must 
buy. It Gave the Farmer the First Beneficial Legisla- 
tion He Has Had In Years. 

There is a second way in which a Protective Tariff is a detri- 
ment to American farmers. No people, producing an excess 
of farm products, can export them, unless the imports coming 
back are largely the products of the factory. That is, in order 
for them to buy our farm products they must be able to sell us 
the products of their factories. 

The illustration on the opposite page speaks volumes both to 
the millions of our farming population and to the millions more 



56 TARIFF PRIMER 

working on salary and wages in the towns and cities of the na- 
tion. Look it over. Think it out for yourself. It means low 
wages, tragic decline in price of farm products, industrial stag- 
nation and bankruptcy. And just to the extent that the new 
Tariff Wall obstructs our trade with the world, it will produce 
these effects. In other words. To THE EXTENT THAT THE 
fordney-mccumber tariff keeps foreign goods 
Out It Will Keep Home Goods In. 

Therefore, when tariff rates on manufactured products are so 
high as to be prohibitive — which they are on scores of articles 
under the Fordney-McCumber Tariff — and so keep Foreign 
Goods out, then the hundreds of millions in Foreign Lands can- 
not buy from our farmers; because they cannot export their 
own products to pay for them — ^when a Tariff Wall keeps them 
out. This is exactly what happened in 1919. Europe was un- 
able to buy our farm products even though her millions were 
starving — because they had nothing to give in exchange. The 
result was that our farmers had to dump their enormous surplus 
into their own home markets — and the bottom dropped out. 
We barely escaped the greatest industrial crash in our history. 

It is now proposed by means of an artificial barrier, known as 
the Fordney-McCumber Tariff, To Do EXACTLY THE SAME 
Thing. They have the goods to send in but the Tariff Wall 
is designed to keep them out. The American farmer has yet 
to realize the great economic truth that THE SAME TARIFF 
Wall Which Keeps Foreign Goods Out Keeps Home 
Goods In. 

When at length the light breaks, the American farmer will 
feel the stir of the Heroic Spirit of '76, and will declare that 
since he cannot be benefited by a Tariff Wall around his pro- 
duct, neither shall the manufacturer of the East be further en- 
riched by a Tariff Wall; that since he must sell his products in 
the Open Market of the World in competition with the products 
of all lands and nations, so likewise shall the American manu- 
facturer sell to him in the Open Market, and in competition 
with the Goods and Products of all other lands and nations. 
Then, and not till then, will come a new order of things for the 
American Farmer. 



Does the Importation of Foreign Goods, Etc, 57 



CHAPTER XVII. 

Does the Importation of Foreign Goods Throw Our 
Own Labor Out of Employment? 

That question goes to the very heart of the whole Tariff issue. 
Everywhere there exists a positive fear and dread, amounting 
to actual terror, at the very thought of having large quantities 
of Foreign Goods brought into the country. It is a universal 
fear — a universal delusion. Furthermore, you get exactly the 
same reason for this fear in China or Germany, Russia or Italy, 
France or Mexico, Canada or the United States. The ancient 
fear of the invasion of foreign armies has been transferred to the 
fear and terror of an ''invasion'^ of foreign goods. 

This belief is based on the supposition that there is a direct 
conflict, a positive antagonism, between Importing and Pro- 
ducing — a conflict so direct that when either goes up the other 
must of necessity go down: the more goods you produce in 
your own country, the less you will import from foreign coun- 
tries — the more you import from foreign countries, the less you 
will produce at home. In other words, to the extent that any 
people import they will not produce. 

The basis of this world-wide superstition that the importation 
of Foreign Goods throws home labor out of employment seems 
perfectly reasonable, provided you see only immediate results 
and are incapable of thinking back to see what is necessary, 
absolutely necessary, in order that you can import Foreign 
Goods. Or if you assume that we should produce everything 
we consume — NO MATTER HOW GREAT THE ECONOMIC 
Loss IN Doing It — then the conclusion will seem perfectly 
valid to you. 

In other words, it requires but little intelligence to believe 
that foreign importations throw our own labor out of employ- 
ment. But it does require complex thinking to be able to see 
that it does not throw home labor out of employment, but 
gives employment to home labor instead. And yet that is the 
conclusion which a high order of intelligence must reach. 

The primary facts in the case are undisputed. For example, 
if you buy all your shoes abroad you will not patronize our own 
makers of shoes. If you buy all your clothing abroad — that 



58 TARIFF PRIMER 

is, from foreign producers — you will not give employment to 
the factory workers in our own mills. In short, if you buy 
everything abroad then you will buy nothing at home. That 
much is certain. 

jBut even if you did all this, and if every man, woman and 
child in America did likewise — a thing impossible — would this 
diminish the amount of wealth actually produced in this coun- 
try? Most certainly not. Would the buying abroad of abso- 
lutely everything we consume throw our own laborers out of em- 
ployment? Not a single laborer. On the contrary, if this 
impossible thing were done according to the Laws of Trade — 
namely, To BUY WHERE YOU CAN BUY THE CHEAPEST, 

AND Sell Where You Can Sell the Dearest— it 
would increase both the volume of our annual production 
of wealth AND THE WAGES OF AMERICAN LABOR. 

What, then, is the source of the delusion that the importation 
of Foreign Goods diminishes by so much the production of 
Home Goods, and so throws labor out of employment? It 
arises, primarily, from the use of the word "buy". There is no 
such thing as buying. We do not "buy" Foreign Goods. We 
trade for them. Foreign peoples do not "buy" from us. They 
trade with us — exchanging goods for goods. They can get our 
goods in no other way. And the only possible way that we can 
get their goods is to trade our goods for them. 

In fact, there really is no such thing as Buying and Sell- 
ing even among ourselves. In the ultimate analysis, what 
takes place is not buying but trading. Always and every- 
where what we call buying and selling, consists in the exchange 
of service for service. Money merely facilitates the exchange 
of these services. But trade does not eliminate production 
among ourselves. We still must produce something, or render 
some service, to exchange for the money with which we 
"buy." And the same principle holds of our consumption 
of Foreign Goods. And yet the old delusion continues and is 
the basis of the whole superstition of Protection. 

For example. Congressman Gernard of Pennsylvania, speak- 
ing in the House, July 14, 1921, said: "We dare not be deceived 
with the thought that America can open wide her gates to the 
markets of the world without destroying and endangering her 
own industrial health." Congressman Graham of Illinois, later, 
said: "Imports were flooding in to us from across the seas, TAK- 
ING THE Place of the manufactured articles which hereto- 
fore our higher salaried American workmen had been making." 



Does the Importation of Foreign Goods, Etc, 59 

Senator Smoot of Utah gave one of the clearest statements 
of this colossal superstition, this gigantic delusion, that I have 
ever seen. On May 20, 1914, he said: "Every dollar of im- 
portation Takes the Place of a dollar's worth of goods 
manufactured in this country." 

Now let us face the facts. Is it true that importations take 
the place of production at home? Is it true that the one is a 
substitute for the other? 

Members of Congress never tire in talking about what they 
call the "free trade" Cleveland Tariff, and the awful flood of 
Foreign Goods that was dumped on our shores. But I find that 
under the McKinley Tariff, 1892, '93, '94— we imported $72,- 
372,955 more goods than we did in the three years under the 
Cleveland Tariff— 1895, '96, '97. Now if the foreign impor- 
tation of goods throws American laborers out of employ- 
ment, the Cleveland Low Tariff did far less damage than the 
McKinley High Tariff. 

Looking further I find that under the Cleveland Tariff we 
imported $16,000,000 worth of iron and steel, while under the 
McKinley Tariff, for the same length of time, we imported 
$53,000,000 worth. Under the Dingley Tariff we imported 
$12,191,198,006 worth of foreign goods. Under the four years 
of the Payne-Aldrich Tariff we imported $6,550,446,703 worth 
of foreign goods. 

Taking the Protectionist theory that "foreign importations 
throw American labor out of employment", how can they 
justify these huge importations under high tariffs. Or do they 
claim that importations of foreign goods throw labor out of 
employment only when it comes in under a Democratic Tariff? 
If their theory is true, then we should not have Tariff Walls 
but an absolute embargo. But is it true, or is it absolutely 
false? 

Now that we have started to reason on the subject, let us 
follow it through to the end. Does the importation of Foreign 
Goods throw our own labor out of employment? The answer 
to that question is this: it does provided we can import without 
exporting. If, on the other hand, we must export to the full 
amount of our imports — dollar for dollar — then the proposition 
is utterly false. It is not a rational theory but a delusion, a 
gigantic superstition. No superstition of the Dark Ages could 
have been more irrational, crude or ignorant. 



Can We Import Without Exporting? 61 



CHAPTER XVIII. 

Can We Import Without Exporting? 

Our artist, rising to a sublime vision of International Trade — 
encompassing the whole earth in his imagination — has endeav- 
ored to picture to our minds the far-reaching arms of the scales 
which Equity holds over sea and land; balancing with perfect 
poise the exchange of equivalences between man and man, be- 
tween nation and nation, in the vast and complex Commerce 
of the world. 

Merely to ask this question — can we import without export- 
ing — is also to answer it. Every child in the Grammar Grade 
at school knows that Trade consists, not of one thing but of two 
things: Imports and Exports. It knows also that each calls 
for the other, that every dollar's worth of imports requires a 
dollar's worth of exports; therefore, that to the extent that any 
people import, they must also export. 

No matter whether we consume Home Goods or Foreign 
Goods, we cannot escape the necessity for production. All 
who consume must produce the equivalent in value of what they 
consume — or live by charity or theft. And production of 
wealth is impossible without the employment of labor. 

How can a people import without exporting? How can they 
export without producing something to export? And how can 
they produce something to export without employing labor? 
To these questions there can be but one answer. Therefore, 
the importation of Foreign Goods does not throw home labor 
out of employment. On the contrary, importing gives employ- 
ment to labor. It may change the direction of that employ- 
ment, but it cannot change the amount of that employment — 
except to increase it. 

Take the case of the laborer. Can he import without export- 
ing? Can he get the necessities of life without giving their 
equivalent in wealth or service? Take the case of the farmer. 
Can the farmer import goods, clothing, machinery, hardware, 
household utensils, etc., without exporting the products of the 
farm with which to pay for them? If so, how can it be done? 
And must not his exports equal his imports — unless he goes in 
debt? And even if he go in debt, he will some time have to 



62 TARIFF PRIMER 

export the equivalent of the debt — which is simply the full 
equivalent of the imports. 

Furthermore, how can he have exports — how can he have 
wheat, corn, oats, potatoes, cotton, etc. — to give in exchange 
for these imports unless he produces them? And how can he 
produce them without employing labor — either his own labor 
or the labor of others? 

Someone may answer: "He need not produce these home 
products in order to get the things he desires. If he has the money 
he can buy them." Quite true. But how can he get the money 
unless he produces something to be traded for it? And so there 
is no escape from the necessity of having to produce commodi- 
ties to be exported equal in value to the imports obtained. 

Every nation must be self-supporting — or live by theft. 
Every state, every county, every community must be self-sup- 
porting, must produce the equivalent of what it consumes. In 
fact, every individual must be self-supporting, must produce 
the equivalent of what he himself consumes — ^^unless he live by 
charity or theft. 

For example, we must consume enormous quantities of wheat, 
oats, corn, cotton and potatoes in this country. We must do 
this — or starve. And in order to get them we must either pro- 
duce them directly for ourselves, or else produce something else 
and trade for them. But it is not correct to say, as all Protec- 
tionists do say, that we can get them either by Production or 
Trade. We must produce in order to trade. Nor is it correct 
to say that we can get them either by Industry or by Purchase, 
that we can either produce or buy. We must produce some- 
thing to sell in order to get the money with which to buy. 

No matter how abundantly the other nations of the earth 
produce the necessities of life, they will not be generous enough 
to donate them to us — except in case of famine. For every 
dollar's worth they ship to us they demand a dollar's worth of 
our products in return. The moment we stop producing for 
them, they will stop producing for us. How irrational, then, 
these wild alarms. They are infantile — the product of a crude, 
narrow and undeveloped brain. They are the result of an 
utter incapacity to comprehend even the most elementary re- 
quirements of Trade, BECAUSE TRADE MEANS Always the 
Exchange of Equivalences. 

In the absence of debt, the Law of Trade is this: EVERY 
Dollar's Worth of Imports Requires a Dollar's 
Worth of Exports. When debt exists between two indi- 



Can We Import Without Exporting? 63 

viduals, or between the people of two nations, then we have a 
wholly different situation. Then the law is this: the debtor 
will always export more than he imports — the creditor will 
always import more than he exports. 

To show that this is true beyond all reasonable doubt, let us 
review the cases cited from our history, and show that no matter 
how great the volume of importations they had to be met with 
a volume of exports equally great. In fact, they were met with 
a volume of exports vastly greater — because UP TO 1916 WE 
Were a Debtor Nation. For instance, while foreign labor 
was producing for us $2,276,425,051 worth of goods imported 
under the Cleveland Tariff, American labor was producing for 
them goods to the amount of $2,741,138,659. Take the case 
under the McKinley Tariff. While we were "buying" from 
foreign nations goods to the amount of $2,348,798,006, they 
were "buying" from us a still larger bill of goods, amounting to 
$2,770,083,914. 

Under the Dingley Tariff, as shown before, we imported $12,- 
191,198,006 worth of Foreign Goods. Did this diminish the 
amount of our domestic production, or throw our labor out 
of employment? It did not. And it did not for the reason 
that while we imported only that amount of foreign products, 
the people of foreign lands imported our products to the amount 
of $18,270,503,750! 

It is true that we imported $6,550,445,703 worth of goods 
under the Payne-Aldrich Tariff. But we exported in return 
goods to the amount of $8,464,511,477. Protectionist speakers 
all over the country will point to the fact that under what they 
will call the "free trade" Underwood Tariff, there was dumped 
into our markets goods to the amount of $22,039,044,693! And 
these figures will strike terror into the hearts of their hearers! 
They will probably not couple with this fact the corresponding 
fact, which is that while foreign labor was filling our orders for 
goods to this amount, we were filling orders for them aggregat- 
ing to the colossal sum of $40,999,714,370! 

Therefore, all the facts and figures in the case show that the 
importation of foreign goods — no matter how great the amount 
— instead of throwing labor out of employment, gives employ- 
ment to labor. And this for the reason that always, and every- 
where. Imports Must Be Met By Exports, Dollar 
For Dollar. And what is true of our country is true of every 
other country on earth. 




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Our "Favorable" Balance of Trade 65 



CHAPTER XIX. 
Our "Favorable" Balance of Trade 

On the opposite page our artist has pictured Uncle Sam con- 
fronted with a great problem. In looking over his books our 
Uncle Sam has discovered that he has been shipping out far 
more goods than he ever gets any imports for in return. He 
fears that he has been over-doing it. And so the question in 
his mind is as to whether it is a gain or a loss to send to foreign 
countries hundreds of millions of dollars' worth of commodities 
for which he gets absolutely no commodities in return. That 
is Exporting Without Importing. 

Uncle Sam has been told, just as we have been told, that the 
more goods you send out and the less goods you get back in re- 
turn, the better you are oif . From McKinley to Fordney and 
McCumber, he has been told that this excess in the exportation 
of merchandise is one of the many "blessings" which only a 
Protective Tariff can give. Furthermore, that the excess in 
the exports of merchandise over imports is made up BY HUGE 
Importations of Gold! 

The Protectionist brain has taken special delight in the fact 
that we ship out hundreds of millions of dollars' worth more 
than we get back. I presume if we got absolutely no imports 
in return for our exports, men of the mental type of Fordney, 
McCumber and their followers, would be happier still. Fur- 
thermore, they think it the direct result, the necessary effect, 
of a Protective Tariff. McKinley used to "point with pride" 
— instead of regret — to the excess of our exports over our im- 
ports. Then he would exclaim: "IT WILL ALL COME BACK 
In Shining Gold." 

But this is not true. WE HAVE ACTUALLY EXPORTED 
More Gold and Silver Than We Ever Got Back. 
When he turned to the official reports. Uncle Sam discovered 
that from 1790 to 1915, he had exported merchandise to the 
amount of $58,820,315,030. Looking on the other side of the 
ledger, he finds that he got back in return merchandise amount- 
ing to $49,999,482,199. That left a balance of $8,820,832,831 
which the people of the rest of the world were owing him for the 
goods he had shipped them. 



Our "Favorable" Balance of Trade 67 

But when our Uncle Sam turned to see if the excess in the 
importation of bullion was enough to make good this balance, 
he got the shock of his life. To his amazement he discovered 
that he had actually exported more gold and silver than he ever 
got back. 

Looking at the figures closely he found that there had come 
back in payment for these goods, which were duly and properly 
delivered and accepted by the people of foreign lands, only 
$3,689,895,451. On the other hand, when he turned to see how 
much gold and silver he had exported^ in addition to the huge 
volume of products he had sent out, he found that his exports 
of bullion amounted to $5,368,790,625. This was the astound- 
ing thing. He had actually sent out $1,678,695,174 more of 
gold and silver than ever came back; leaving a grand total in the 
excess of exports over imports of $10,499,728,005, for which 
absolutely nothing came back — but receipted bills. 

Thus did Uncle Sam discover, as we have now discovered, 
that this excess of exports over imports does not "come back in 
shining gold." In fact, that it DOES NOT COME BACK AT 
All. These vast volumes of exports go, not to get the equi- 
valent imports in return, but to pay Interest, Dividends and 
Rent. They are really no part of commerce. They bring 
nothing in return. They are not an exchange. They stand 
more in the light of Tribute. Much of them goes across the 
ocean to pay the royal families of Europe and other large land 
holders, FOR OUR PRIVILEGE OF LIVING ON AMERICAN 

Soil. 

In the cartoon on the opposite page we have a vivid por- 
trayal of absurd idea that a people are enriched by exporting. 
With this goes the delusion that a people are injured and im- 
poverished by importing. Here we see the necessities of life, 
the raw materials of food and clothing, being loaded on the 
great ship to be sent to the people of foreign lands. 

But in the background our artist shows us in a sort of "double 
exposure" — as they say in motion pictures — showing poverty 
and want gazing at the spectacle of seeing the things they need 
going to foreign lands. And yet this in itself is supposed to be 
beneficial. Whereas, Protectionists would have us believe that 
if that ship were bringing in and unloading, instead of carrying 
away, the things of which millions of our people are in need, 
it should be regarded as an evil, and even disastrous, if too long 
continued. The cartoon is a portrayal of Exporting without 
Importing. And that process, whether applied to an indi- 



68 TARIFF PRIMER 

vidual, a family, or a nation — means impoverishment in 
the end. 

Congressman Fess, of Ohio, now candidate for United States 
Senator, in the spring of 1914, claimed that the Underwood 
Tariff had been a loss to the country of a quarter of a billion of 
dollars. He made up the loss by adding together the goods we 
did not export — that was a total loss — and the goods which 
we imported. That was also a total loss — to us! Can stupidity 
and economic nonsense go beyond that? 

Some one has well said that if a people are impoverished by 
importing, but are enriched by exporting, then if all the ships 
that started from all the ports of the world loaded with the ne- 
cessities of life were to go down in mid-ocean, what a blessing 
it would be to mankind! 

Henry George, one of the greatest thinkers the economic world 
has produced, said: "Commerce is not always the realization 
of an exchange, but more often THE EXACTION OF A TRIBUTE. 
When Rome was mistress of the world, Sicily, Spain, Africa, 
Egypt and Britain exported to Italy far more than they im- 
ported from Italy. But so far as this excess of their exports 
over their imports indicating their enrichment, it indicated 
their impoverishment. It meant that the wealth produced in 
the provinces was being drained to Rome in taxes and tribute 
and rent, for which no return was made. 

"The tribute exacted by Germany from France in 1872 
caused a large excess of French exports over imports. So the 
foreign debt which has been fastened upon Egypt requires 
large amounts of the produce of that country to be sent away 
for which there is no return in imports. All war indemnities 
give rise to a movement in trade which manifests itself on the 
side of the conquered in exports alone, and on the side of the 
conquerors in imports — FOLLOWED BY NO RETURN. 

"If not true already, it will not be many years before the 
English aristocracy [and royal family] will draw far larger in- 
comes from their American estates than from their home estates 
— incomes to supply which we must export without any return 
in imports." 

The same process of exporting without importing, is going 
on all about us. The farmer who must pay interest on debt is 
constantly exporting more than he imports. The tenant is 
constantly exporting from the land on which he toils more than 
he imports. But he does not regard this fact as "favorable" — 
at least to him. So, likewise, the farmers and fruit growers, 



Our "Favorable*' Balance of Trade 69 

lumbermen and miners, and all other people of the West, are 
constantly exporting towards the East — where the capitalists 
who hold their notes and mortgages reside — vastly more than 
they import from the East. 

One of the objects of the Fordney-McCumber Tariff, by in- 
creasing the price of manufactured products more than it can 
possibly increase the price of farm products, is to still more in- 
crease this drain of the wealth of the West towards the East — 
Exporting Without Importing. 

Owing to our tremendous exportations since 1915 our whole 
situation has been changed. We are now A CREDITOR NA- 
TION. From 1915 to 1920, inclusive, our total excess of both 
merchandise and bullion exported over our imports of merchan- 
dise and bullion was $18,104,016,451! THIS Is A FINANCIAL 
AND Industrial Achievement Without A Parallel 
IN THE History of the World. It changed us from a 
debtor to a creditor nation. From this point on, if the peoples 
of Europe pay their debts, OUR IMPORTS WILL EXCEED 
Our Exports. 

But our exports still exceed our imports. That means that 
Europe Is Still Going in Debt to Us. In the present 
industrial condition of Europe, it may be years to come before 
she can reverse her position and pay her debts. But when that 
time does come, no matter when, instead of exporting more 
than we import — whether we have Protective Tariffs, Revenue 
Tariffs, or absolute Free Trade — our imports will exceed our 
exports. 

Thus have we shown that the seeming exception to the rule 
that imports and exports are equal, is in no wise due, either to 
High Tariffs or to Low Tariffs, but to the great fact of Debt — 
the fact of Dividends, Interest and Rent. Amidst it all every 
dollar's worth of imports called for a dollar's worth of exports 
— no more, and no less. The rest went to pay debts, AND 
Would Have Been Exported if There Had Been No 
Imports Whatsoever. 



My Two Islands 71 



CHAPTER XX. 

My Two Islands 

Now that we are nearing the last chapter, let us get all the 
threads of thought woven into the warp and woof of one de- 
cisive and comprehensive Conclusion. And this can be done 
by answering one specific question: Is TRADE INJURIOUS, 
OR Is It Beneficial? 

That is, in brief, the whole issue between Protection and 
Trade. Both cannot be right. One or the other is wrong. 
Which is it? If Protection be a good thing, then is Trade a bad 
thing: because Protection exists only for the prevention of 
Trade. Ought Trade to be abolished? It ought, if it be a bad 
thing. Ought Protection to be abolished? It ought, if Trade 
be a good thing. 

And so we cannot decide upon the merits of a Protective 
Tariff until we decide upon the merits of this thing which a 
Protective Tariff is designed to prevent — namely. Trade, Com- 
merce, Exchange. That is the issue, and the only issue. I 
know it has not been put in this form, but that is the verdict 
which a profound and final analysis must give. 

What is Trade? Why does it exist? What causes it? Cen- 
turies and centuries ago, way back in the dim dawn of Civiliza- 
tion, mankind discovered that by trading and exchanging 
goods with each other, THEY MULTIPLIED THE PRODUCT- 
IVENESS OF Their Own Labor. They saw that Trade could 
be made a mighty agency in the creation of wealth. NO 
Other Economic Discovery the Human Mind Has 
Ever Made Can Possibly Compare to the Discovery 
and Development of Trade. 

And for the reason that all other discoveries — even Civiliza- 
tion itself — depend upon the fact of Trade. Without Trade 
and Commerce no ship would float the sea, no railroad could 
exist, inventions would be unknown. They all depend upon 
Trade, Barter, Exchange — Commerce. 

Abolish Trade and mankind would go back to barbarism and 
might. The larger part of the human race would perish. The 
present population of the globe would be utterly impossible 
without Commerce. Why? Because there cannot be differ- 



72 TARIFF PRIMER 

entiation of employments, there cannot be "division of labor," 
without Trade. Division of Labor always implies and necessi- 
tates an exchange either of goods or service. Without Division 
of Labor, Civilization is impossible. But without Trade there 
can be no Division of Labor. 

Each human being must have Food, Clothing and Shelter. 
He must have these things — or perish. They can be obtained 
only by labor. They do not exist free. They must be pro- 
duced. In a just state of society each human being must either 
produce them directly for himself, or produce something else 
and trade for them. 

To illustrate the Law of Trade our artist has pictured for us 
two islands located quite near each other. One we will call 
"Coal Island". The average returns of labor expended in 
digging coal are a ton a day — six tons a week. The other we 
will call "Wheat Island", because its soil is favorable to the 
production of wheat. On the average, it yields a bushel of 
wheat a day to labor — six bushels a week. But it is unfavor- 
able for the production of coal. While it has mines, yet the 
veins are so thin that it takes a week's labor to produce a single 
ton of coal. 

But on Coal Island, were they to engage in the growing of 
wheat, their wages would be just the reverse of those on Wheat 
Island. Since it would take a week's labor, on the average, to 
grow a bushel of wheat, the wages for labor would be only one 
bushel of wheat a week. 

Nor is this difference due in any degree to the productiveness 
of the laborers themselves. IT Is DUE TO THE DIFFERENCE 
IN THE Productiveness of Land in Reference to 
These Two Products. The same amount of labor which 
will produce one bushel of wheat on Coal Island, will produce 
six bushels on Wheat Island. And the same in reference 
to coal. 

Let us now introduce Trade, Commerce, between the two 
islands and see the manifold blessings that will come to the 
people of each island. The people on the Wheat Island must 
have coal as well as wheat. If, instead of producing coal for 
themselves, they produced wheat and traded it to their neigh- 
bors for coal. The Productiveness of their Labor 
Would Be Increased Six Fold. In other words, by the 
mere fact of Trade the normal, natural wages of their labor will 
be increased 500% — measured in terms of coal. They now 
have six tons of coal as the result of their labor, instead of one. 



My Two Islands 73 

How stands the case with the people on Coal Island? They 
must have wheat as well as coal in order to live. If, instead of 
producing wheat directly for themselves, they produce coal 
and trade it for wheat, they will have six bushels of wheat in- 
stead of one as the result of their labor. And so Trade has also 
increased their wages 500% — ^measured in terms of wheat. 
And these are the results, in principle, which follow from Trade 
everywhere, in all countries, under all forms of government. 

Thus do we see that Trade is in itself A PRODUCER OF 
Wealth. This fact mankind discovered centuries ago. 
Furthermore, we see how Trade makes each country a composite 
of all lands and climes; so that — barring the cost of transporta- 
tion — ^the result is the same as if each island produced equally 
well both wheat and coal. 

We see also that Trade does not enable the people to live 
from the labor of others, but that EACH PRODUCES THE 
EQUIVALENT OF ALL THAT IT CONSUMES. It is the labor 
of the men in the wheat fields of Wheat Island that produce the 
coal which they consume. How do they do this? By devoting 
themselves exclusively to the production of wheat — thus pro- 
ducing an excess beyond their own needs — they make it possible 
for the people on Coal Island to devote themselves exclusively 
to the production of coal. And the people on Coal Island as 
certainly produced the wheat on Wheat Island which they con- 
sume, as tho they went over there and sowed the seed and reaped 
the harvest for themselves. 

Now suppose the owners of the coal land on Wheat Island 
should come before their Congress and say: "Why should we 
*buy' our coal? Why not produce it for ourselves? Let us 
start a new industry, keep this money at home, and give em- 
ployment to our own labor by producing our coal instead of 
buying it. Why give employment to the laborers on Coal 
Island by having them produce all our coal for us? Why put 
ourselves at the mercy of these 'foreigners'? Give us a Tariff 
high enough, say 600%, and we will start a new industry on this 
island." (Gentle reader, is not this a familiar argument?) 

And so they build a High Tariff Wall around Wheat Island 
for the "protection" of Producers of coal. At the end of the 
year, it is true, the owners of the coal lands on Wheat Island 
can "point with pride" to a new industry. No question about 
that. There it stands. The island now produces its coal in- 
stead of buying it. But what is the result? What effect upon 
the total wealth of the island? 



74 TARIFF PRIMER 

This appalling result: Measured in terms of coal, they have 
only one-sixth as much wealth as they would have had by produc- 
ing wheat and trading for coal. In other words, the natural wages 
of labor is only one-sixth under a protective Tariff of what it 
was under the former Free Trade. Has labor been given more 
employment than before? Not at all. It has simply been 
diverted, diverted from the most productive channels of employ- 
ment into the least productive channels. And by so doing it 
has not increased the amount of its employment. But it has 
diminished its wages to one-sixth of what they were before! 

Apply the same principle to Coal Island and the same result 
follows. The labor which was formerly engaged in the pro- 
duction of coal is now employed in the production of wheat. 
True it is they are now producing their wheat instead of buying 
it— but at a TREMENDOUS Economic Loss. The rewards 
of labor are only a sixth of what they were under the former 
Free Trade. Furthermore, at the end of the year the total 
wealth of the island is only one-sixth of what it would have been 
had the people produced coal — the thing they can produce to the 
best advantage — and traded coal for the other necessity of life 
which the people on Wheat Island can produce to the best ad- 
vantage. 

This simple illustration enables us to see the full working of 
the principle of Trade. And to this law there is no exception. 
There can be none. It is as universal as the law of gravitation. 
Substitute continents for islands. Substitute hundreds of 
products for only two products, and the result is still the same. 

Here again, we see the great economic truth, the truth that 
there are two ways by which the people of any country can 
obtain the necessities of life. One way is to produce them di- 
rectly for themselves. The other way is to produce something 
else and trade for them. If left free, the people will take which- 
ever course gives them THE GREATEST RESULTS FOR THE 
Least Amount of Labor. 

The principles governing Trade between the people of differ- 
ent nations are identical with the principles governing trade be- 
tween the people of the same community. The motive is the 
same in both, the cause is the same in both. And the results 
are the same in both. ALL ECONOMISTS ARE AGREED ON 
That Point. 

If buying the necessities of life instead of producing them 
direct, throws labor out of employment in the nation, it will 
throw labor out of employment in each family. If the money 



My Two Islands 75 

which goes out beyond our borders for goods — a thing which in 
reality never happened, because trade is the exchange of goods 
for goods and not of goods for money — then the money paid out 
by each family for the necessities of life would be a positive loss. 

There was a time back in the Pioneer Days when each house- 
hold produced practically everything that it consumed. It was 
a complete economic unit in itself. Each family not only grew 
its own wool, but carded it, spun it into yarn, wove the yarn 
into cloth, and then made the cloth into clothing. 

With the coming of the Factory System all was changed — 
revolutionized. Barring garden products and a few other food 
products, the vast majority of all the families in America today 
produce absolutely nothing in the finished form which they 
themselves consume! And yet no rational mind would claim 
for a moment that this has diminished the productiveness of 
wealth, or the wages of labor. On the contrary, it has greatly 
increased both — multiplying them many fold. And yet all 
this industrial progress was made possible only by the fact of 
Trade — both domestic and foreign. 

This broad view of International Trade enables us the better 
to see how perfectly the Fordney-McCumber idea of things 
represents what Darwin called "arrested development" — or, 
better still, "reversion to previous type." The idea which 
builds High Tariff Walls in the world of today, belongs to that 
primitive, undeveloped brain so splendidly adjusted to the prim- 
itive economic conditions when Trade was unknown, when every 
"foreigner" was a foe, and when each family, or clan, produced 
All the Things That It Consumed. 

The illustration of the Two Islands enables us to see, also, 
that the so-called "cost of production" theory is part and parcel 
of the Protectionist theory. If the one falls, and fall it must, 
the other goes down with it. 

Now just what is the limitation which the cost-of -production 
theory places on the avarice and rapacity of the "protected" 
Interests? This theory is that the tariff rate on Foreign Goods 
shall be no higher than is necessary to raise their cost to home 
Consumers to that price level actually required in order to make 
a "reasonable profit" on the competing Home Goods. 

For example, the cost-of -production theory would say to the 
owners of wheat lands on Coal Island: "You can have a tariff 
of 500% on your wheat, but you cannot have a tariff rate of 
a 1000% or of even 600%. Such rates would be excessive, 'un- 
conscionable' — extortionate." But I submit to you that to 



76 TARIFF PRIMER 

pass such a law as will enable the Producers of wheat on Coal 
Island to compel the Consumers of wheat to pay even six times 
as much for wheat as they would have to pay in the Open Mar- 
ket — or any price above the Open Market Price — is also ex- 
tortion. 

Furthermore, if the "difference in the cost of production at 
home and abroad" could be accurately determined and equalized 
thru Tariff Rates — a physical and mathematical impossibility 
— what would be its effects on the world? Simply this: It 
would deprive the whole human race of the enormous and in- 
calculable benefits and blessings of Commerce — ^AND MAKE 
THE SUPPORT FO THE PRESENT POPULATIOM OF THE GLOBE 
IMPOSSIBLE! 

In 1846, as the result of 20 years of intense struggle and 
agitation, led by Richard Cobden and John Bright, England 
abolished her Corn Laws — tariffs on farm products. It did 
not establish Free Trade, because the products of Trade were 
still taxed. But it did abolish the principle of Protection. No 
tariffs were levied on foreign products competing with similar 
home products. It is to me the most dramatic, heroic and in- 
tellectual period in English History. 

As the result of the long campaign in the principles of Poli- 
tical Economy and Free Trade which Cobden and his followers 
had conducted. Lord John Russell, in a letter to his London 
constituents in 1845, wrote as follows: "I used to be of the 
opinion that corn was an exception to the general rule of poli- 
tical economy." He had supposed that while there should be 
Free Trade in everything else, there should be Protection in 
foodstuffs. He had now changed his mind, for he ended his 
letter by saying: "Let us, then, put an end to a system which 
has proved to be the blight of commerce, the bane of agricul- 
ture, the source of bitter division among classes, the cause of 
penury, fever, mortality and crime among the people." 

The reader is referred to Ridpath's "Universal History" for 
a most dramatic account of this mighty event in human history. 
He is also referred to a Chapter in "The Tariff and the Trusts" 
by Franklin Pierce: "How England Got Free Trade." I will 
suggest also a small book recently published in England under 
the title: "The Hungry Forties." This book is made up 
entirely of letters and interviews of the "oldest inhabitants" 
whose memories went back to the direful days in England when 
she had a Protective Tariff. It was edited by a daughter of 
Richard Cobden, Mrs. Cobden Unwin. It is the best detailed 



My Two Islands 77 

history of the economic condition of the common people of 
England that has ever been written. 

Ridpath thus presents the terrible conditions which existed 
under a Protective Tariff in England :"Circumstances favored, 
as they have rarely favored, the cause of the reforming party. 
That most unanswerable of all arguments, Human Misery, 
came to the aid of the propaganda. Wretchedness, woe, want, 
starvation, despair, uttered their voices, and the cry at length 
reached the profoundest recesses of prejudice and conservatism. 
It reverberated through the Kingdom. The towns were 
shaken at first and then the countryside began to heave and 
swell. It was not, as we have said, the voice of man, but the 
voice of hunger, of thirst, THE CLAMOR OF WOMEN AND 
Children for Bread." 

In his great debate on the Tariff with James G. Blaine, in the 
North American Review — back in the 80's — Gladstone showed 
that the abolition of Protection in England had increased the 
wages of the working classes of England 100%. It thus in- 
creased their wages by INCREASING THEIR PURCHASING 
Power. 

Every Protectionist in Congress has had to admit that wages 
are higher in England than in any other country in Europe, and 
that they are lowest where there is the highest "Protection." 
In short, there can be no hope for the abolition of Poverty, or 
the abolition of War, until this country — and all other coun- 
tries — substitute for the iniquitous Class Legislation of Pro- 
tective Tariffs, the maxim of Thomas Jefferson: EQUAL 
Rights for All— Special Privileges to None. 

Therefore, whatever obstructs the free working of this univer- 
sal, world-wide Law of Trade, Is TO THE DETRIMENT OF THE 
Human Race. Whoever favors its obstruction, whoever ad- 
vocates the enactment of a Protective Tariff, is doing all in his 
power To INCREASE THE AMOUNT OF LABOR WHICH MAN- 
KIND Must Perform In Order to Live. He is not friend 
but foe. While his ignorance of the fact that this effect will 
follow, and always has followed, may exempt him from moral 
condemnation; IT DOES NOT EXEMPT THE HUMAN RACE 
From the Disastrous Effects of Building Tariff 
Walls. 



Revenue Tariffs vs. Protective Tariffs 79 



CHAPTER XXI. 

REVENUE Tariffs vs. Protective Tariffs 

There are two distinct classes of Tariff Walls. And this for 
the reason that there are two distinct theories, or Systems of 
Thought, relative to the Tariff— the PROTECTIVE THEORY 
and the REVENUE THEORY. 

The Protective Theory has been associated with the Repub- 
lican Party almost from the beginning of its history, but found 
its first distinctive expression in the High Tariffs of 1867 and 
1870. The doctrine of "Tariff for Revenue only" has been pro- 
claimed and defended by the Democratic Party thruout its long 
history, dating back to its founder, Thomas Jefferson. 

Turning to the illustration, the first thing that strikes our 
attention is the fact that the PROTECTIVE TARIFF WALL is 
much higher than the REVENUE TARIFF WALL — more than 
twice as high. This fundamental distinction has set the two 
parties directly against each other in the framing of every 
Tariff Bill from 1867 down to the Fordney-McCumber Tariff. 

Why is it that one party always wants high tariff rates, the 
other always wants low tariff rates? This direct conflict be- 
tween them is due wholly to the attitude of each political party 
in reference to taxing the general public — not for the support of 
the Government— But FOR THE SUPPORT AND ENRICH- 
MENT OF Private Individuals and Corporations. 

On this vital issue the Republican Party affirms and the 
Democratic Party denies; declaring that the RIGHT TO TAX 
begins and ends IN THE NEEDS OF THE GOVERNMENT; and 
that no party, and no government, has the right to tax the 
general public FOR THE BENEFIT OF PRIVATE Individuals 
— unless they are recognized as paupers, or are justly entitled 
to government bounty for military service in defence of the 
state. 

As pointed out in Chapter X, the increased price of Foreign 
Goods, due to the Tariff, goes into the Public Treasury. This 
I have called the Revenue Branch of the Tariff. The increased 
price of Home Goods, due to the Tariff on Foreign Goods, goes 
into Private Pockets. This is the Protective Branch of the 
Tariff. To it the Democratic Party is utterly opposed. 



80 TARIFF PRIMER 

On the other hand, the Republican Party for generations has 
staked its claims to the suffrage of the American people on the 
fact that at every opportunity it has made the stream of wealth 
which the Tariff pours into private pockets just As LARGE As 
It Could Be Made, regarding the production of that stream 
of wealth as the real object of a Tariff. 

With the Revenue Theory, raising revenue for the govern- 
ment is the only legitimate purpose of a Tariff. It regards the 
increased price of Home Goods resulting as purely "incidental", 
undesirable, but practically inevitable under this mode of taxa- 
tion. But it makes this contribution to the enrichment of 
private individuals as small as possible by levying low rates in- 
stead of high rates. 

With the Protective Theory, on the other hand, raising 
revenue for the Government is purely "incidental"; while rais- 
ing revenue for private pockets is the real purpose in taxing 
Foreign Goods. It maintains that the whole prosperity and 
industrial progress of the nation is due to the employment of 
this "policy" in the past. It stands for High Tariffs. 

Not that the party is opposed to raising government revenue 
by Indirect Taxation — of which the Tariff is the most iniqui- 
tous form. It favors this mode of taxation. It was the Demo- 
cratic Party that took the first step towards taxing the people, 
not on their necessities, but in proportion to their ABILITY TO 
Pay. There was embodied in the Underwood Tariff a Gradu- 
ated Income Tax. Later on, the Wilson Administration sup- 
plemented this with a Corporation Tax, an Inheritance Tax, 
and an Excess Profits Tax. THIS WAS THE GREATEST 
Step Towards Social Justice that Has Been Made 
IN Taxation Since the Founding of the Republic! 

Great is the contrast between raising Government revenues 
by a Tariff tax, and raising them by a Graduated Income and 
Corporation Tax. One is a tax on Want, the other is a tax on 
Wealth. One is a tax on Necessities, the other is a tax on 
Possessions. One is a tax on what you must get in order to 
live, the other is a tax on what you actually have. In short, 
one is a tax on Expenditures — the other is a tax on Incomes. 

The reason for the change was clearly stated by Senator 
Underwood — then Chairman of the Ways and Means Com- 
mittee — when he introduced his bill in the House, April 23, 
1913. He said: 

"The Democratic Party stands for a Tariff for revenus only, with em- 
phasis on the 'only*. We do not propose to tax one man for the benefit of an- 



Revenue Tariffs vs. Protective Tarifs 81 

other, except for the necessary revenue we must raise to administer this 
government economically." 

"The time has come in this country when the great untaxed wealth of 
America must and shall bear its fair share of the burden of running the 
government of the United States. We remove the taxes at the custom 
house on necessaries purposely to levy a tax on wealth.'* 

The fact must not be overlooked that the Underwood Tariff, 
to the extent of its rates, was a Protective Tariff. Any Tariff, no 
matter how low, yields "protection." Senator Underwood 
himself has steadily maintained that the rates in his Tariff are 
excessive in reference to cotton and woolen goods. Custom 
house reports show them going as high as 60% in 1921. Mill- 
ions were made under them by the American manufacturers of 
these goods. And yet the Fordney Tariff has more thait 
doubled these rates on cotton and woolen goods. 

I maintain that the Underwood Tariff was the best tariff, 
measure ever enacted in this country. It was so for thre( 
reasons: First, because it contained a Graduated Income Tax,! 
later on supplemented by a Corporation Tax, Inheritance Tax,' 
etc. Second, because it put practically all raw materials on the 
Free List. Third, because the rates on its "dutiable" goods 
are lower than in any previous Tariff since the Civil War. 

There are three ways by which the Underwood Tariff can be 
improved: (1) Extend and perfect its forms of Direct Taxation. 
(2) Gradually put on the Free List all products that are con- 
tinuously sold in foreign countries, (3) Lower its excessive 
rates on cotton and woolen goods. 

The tendency of the present Administration has been, and 
will continue to be, not to raise but to lower the direct taxes 
on the millionaires and "swollen fortunes" of the country, thus 
throwing the burden more and more on the toiling millions thru 
Indirect Taxation — the Tariff, Sales Taxes, Luxury Taxes, etc. 

The issue in this country is the issue in every country. Tariff 
Taxes and other forms of Indirect Taxation have been the 
means thruout the whole of recorded history for the plunder, 
impoverishment and oppression of mankind. Thus does there 
emerge from the Tariff Issue the one great issue of all the ages. 
That issue is this: (1) to abolish all forms of Indirect Taxation. 
(2) To stop taxing people for the support and enrichment of 
Privileged Classes, taxing them only for the support of the 
Government. (3) And to tax them for it, not on their necessities, 
But in Proportion to Their Ability to Pay. Then, 
and not till then, will we have an honest System of Taxation — 
A Real Republic! 



82 



TARIFF PRIMER 



APPENDIX 






// 





TOTAL IMPORTS AND EXPORTS OF MERCHANDISE AND BULLION 








FROM 1790 TO 


1921 








(Fiscal Years Ending June 30th) 






YEARS 


IMPORTS 


EXPORTS 


Excess of Imports 


Excess of Export 




, 1790 


23,000,000 


20,205,156 


2,794.844 






1791 


29,200,000 


19,012,041 


10.187,959 






1792 


31,500,000 


20,753,098 


10,746,902 






1793 


31,100,000 


26,109,572 


4,990,428 






1794 


34,600,000 


33,043,725 


1,556,275 






1795 


69,756,268 


47,989,872 


21,766,396 






1796 


81,436,164 


58,574,625 


22,861,539 






1797 


75,379,406 


51,294.710 


24,084,696 






1798 


68,551,700 


61.327,411 


7,224,289 






1799 


79,069,148 


78.665,522 


403,626 






Total 


523.592,686 


416,975,732 


106,616,954 


•5^ ^ 




1800 


91,252,768 


70,971,780 


20,280.988 




00 


1801 


111,363,911 


93,020,513 


18.343.398 






1802 


76,333,333 


71,957,144 


4,376,189 




•s 


1803 


64,666,666 


55,008,033 


9,658,633 




* ' 


1804 


85,000,000 


77,699,074 


7.300,926 




^ 

& 


1805 


120,600,000 


95,566,021 


25,033,979 




1806 


129,110,000 


101,536,963 


27.573,037 






1807 


138,500,000 


108,343,150 


30,156,850 






1808 


56,990,000 


22,430.960 


34,559,040 






1809 
Total 


59,400,000 
933,216,678 


52,203,233 


7.196,767 
184,479,807 






748,736,871 






1810 


85,400,000 


66,757,970 


18,642,030 






1811 


53,400,000 


61,316,832 




7,916,832 




1812 


77,030,000 


38,527,236 


38,502,764 






1813 


22,005,000 


27,856,017 




5,851.107 




1814 


12,965,000 


6,927,441 


6,037,559 






1815 


113,041,274 


52,557,753 


60,483,521 






M816 


147,103,000 


81,920,062 


65,182,938 






/ 1817 


99,250,000 


87,671,569 


11,578,431 






1818 


121,750,000 


93,281,133 


28,468,867 






1819 
Total 


87,125,000 
819,069,274 


70,142,521 
586,958.534 


16,982.479 
245.878.589 






13,767,849 


o 


1820 


74,454,000 


69,691,669 


4,762.331 




00 


1821 


62,585,724 


65,074,382 




2,488,658 


^-1 


1822 


83,241,541 


72.160.281 


11,081,260 




o 


1823 


77,579,267 


74.699.030 


2,880,237 




'5 < 


1824 


80.548,142 


75.986.657 


4,561,485 




C4 


1825 


96,340.075 


99,535.388 




3,195,313 




1826 


84.974.477 


77.595.322 


7,379,155 






1827 


79,484,068 


82,324,827 




2.840.759 




1828 


88,509,824 


72,264,686 


16.245.138 






^ 1829 
Total 


74,492,527 
802.209,645 


72,358,671 
761,690,913 


2.133.856 
49.043,462 






8.524.730 



Imports and Exports from 1790 to 1921 



83 





YEARS 


IMPORTS 


EXPORTS 


Excess of Imports 


Excess of Exports 




f 1830 


70,876,920 


73,849,508 




2,972,588 




1831 


103.191,124 


81,310,583 


21,880,541 






1832 


101,029,266 


87,176,943 


13,852,323 




00 


1833 


108,118,311 


90,140,433 


17,977.878 




00 


1834 


126,521,332 


104,336,973 


22.184 359 




v^ 


1835 


149,895,742 


121,693,577 


28,202,165 




o 


1836 


189,980,035 


128,663,040 


61,316,995 




1837 


140.989,217 


117,419,376 


23.560.841 






1838 


113,717,404 


108,426,616 


5,290,788 




a ' 


1839 
Total 


162,092,132 


121,028,416 
1,034,045,465 


41,063,716 
235,338,606 




o 


1,266,411,483 


2.972,588 


"S 


1840 


107,141,519 


132,085,946 




24,944,427 




1841 


127,946,177 


121,851,803 


6,094,374 






1842 


100,162.087 


104,691,534 




4,529,447 




1843 


64,753 799 


84,346,480 




19,592,681 




1844 


108,435,035 


111,200,046 




2,765,011 




1845 


117,254,564 


114,646,606 


2,607,958 






. 1846 


121,691.797 


113,488,516 


8,203,281 






r 1847 


146,545,638 


158,648,622 




12,102,98* 




1848 


154,998,928 


154.032,131 


966,797 






1849 
Total 


147,857,439 
1,196.786.983 


145,755,820 
1,240,747,504 


2,101,619 
19.974,029 




00 


63.934.550 




1850 


178,138,218 


151,898,720 


26,239.498 






1851 


216,224,932 


218,388.011 




2,163,079 


3 


1852 


212,954,442 


209,658,366 


3.296,076 




r 


1853 


267,978,647 


230,976.157 


37,002,490 




1 

1^ 


1854 


304,562,381 


278.325,268 


26.237,113 




1855 


261,468,520 


275.156,846 




13,688,326 


.!4 


1856 


314.639.942 


326,964,908 




12,324,966 




1857 


360.890.141 


362,960,682 




2,070,541 


1858 


282.613.150 


324,644,421 




42,031,271 




1859 
^ Total 


338.768.130 
2,738,238,503 


356,789,462 
2,735,762,841 




18,021,332 




92,775,177 


90,299,515 




/ 1860 


362,166,254 


400,122.296 




37,956.042 


s 


1861 


335,650,153 


249,344,913 


86,305.340 




^ 


1862 


205,771,729 


227,558,141 




21,786,412 


H , 


1863 


252,919,920 


268.121,058 




15,201,138 


1 


1864 


329,562.895 


264 234.529 


65,328,366 




1865 


248,555,652 


233,672,529 


14.883,123 






U866 


445,512,158 


434,903,593 


10.608.565 






. 1867 


417,831.571 


355,374,513 


62,457,058 






1868 


371,624,808 


375.733,001 




4,108,193 




1869 
Total 


437,314.255 
3,406,909,395 


343.256.077 
3,152,320,650 


94,058.178 
333.640,530 






79,051,785 



84 



TARIFF PRIMER 





YEARS 


IMPORTS 


EXPORTS 


Excess of Imports 


Excess of Exports 


!S 


1870 


462,377.587 


450.927,434 


11,450.153 




01 


1871 


541,493.708 


541,262,166 


231.542 






1872 


640.338.766 


524,055,120 


116,283.646 




1 


1873 


663.617,147 


607,088.496 


56,528,651 




«00 


1874 


595,861,248 


652.913.445 




57.052.197 


OS 


1875 


553,906,153 


605.574.853 




51.668.700 


CU-^ 


1876 


476,677,871 


596.890.973 




120.213,102 


to y 


1877 


492,097,540 


658,637.455 




166.539.917 


few 


1878 


466,872,846 


728,605.891 




261.733.045 




1879 
Total 


466,073,775 
5,359,316,641 


735.436.882 
6.101.392.717 




269.363,107 


00 


184,493,992 


926,570,068 


O 


1880 


760,989,056 


852.781.577 




91,792,521 


Ii 
en 


1881 


753,240,125 


921.784.193 




168.544,068 


H 


1882 


767,111,964 


799.959.736 




32.847.772 




1883 


751,670.305 


855,659.735 




103,989,430 




' 1884 


705,123,955 


807,646,992 




102,523 037 


<*5 
00 


1885 


620,769.652 


784,421.280 




163.651.628 


00 

T-4 


1886 


674,029,792 


751.988.240 




77.958.448 


IS 


1887 


752,490.560 


752,180,902 


309,658 




tl 


1888 


783.295.100 


742,368,690 


40,926,410 




1889 
Total 


774,094,725 
7,342,815,234 


839,042.908 
8.107.834,253 




64.948.183 




41,236,068 


806,255,087 


i^ 


1890 
' 1891 


823,286,735 


909,977,104 




86.690,369 




881,175,643 


993,434,452 




112,258.809 


o 


1892 


897,057,002 


1,113,284,034 




216.227.032 


00 


1893 


910,768,555 


997,083,357 




86.314.802 




. 1894 


740,730,293 


1,019,569,898 




278.839.605 




1895 


788,565,904 


921,301,932 




132.736.028 


OS < 


1896 


842,026,925 


1,055,558,555 




213,531,630 


00 


1897 


880,278,419 


1,153,301,774 




273,023,355 




* 1898 


767,369,109 


1,301,993.960 




534.624,851 




1899 
Total 


816,778,148 
8,348,036,733 


1.320,864,443 
10,786,369,509 




504,086.295 






2.438.332.776 




1900 


929,770,670 


1,499.462.116 




569.691.446 


00 


1901 


925,609,873 


1.605.235.348 




679.625,475 


U-l 

o 


1902 


983,574,456 


1.480,020,741 




496.446,285 


is 


1903 


1,094,864.755 


1,511,482,533 




416,617,778 


3^ 


1904 


1.117,911.553 


1,591,759,959 




473.848.406 


1905 


1,198,646,897 


1,660,004,502 




461.357.605 


bo 


1906 


1,367,226.716 


1,848,307,154 




481.080.438 


c 


1907 


1,591,878,298 


1,988,989.327 




397,111.029 


5 


1908 


1,387,337,210 


1,991,127,472 




603.790.262 




1909 
, Total 


1,399.879,023 
11,996,699,451 


1,810.225,714 
16.986,614.866 




410.346.691 






4.989,915.415 



Imports and Exports from 1790 to 192! 



85 



a 






a 



YEARS 


IMPORTS 


EXPORTS Excess of Imports Excess of Exports 


1910 


1.645,504,529 


1,918,834,796 


273,230.267 


1911 


1,646.770.367 


2.136.579.810 


489,809.443 


1912 


1,749,251,653 


2,326,541.422 


577.289.769 


1913 


1,923,470,775 


2,615,261,082 


691.790.307 


1914 


1,990,790,920 


2,531,582,700 


540.791.780 


1915 


1.878.848,818 


2,965.755,675 


1.086,906,857 


1916 


2.731,047,186 


4.483,523,956 


1.752,476,770 


1917 


3.671.534.774 


6.660,249.580 


2,988,714,806 


1918 


3,140,407,039 


6.249,744,994 


3.109,337,955 


1918 


1,533.363,204 


3,353,497,069 


1,820,133,865 


1919 


4,070,308,996 


8,527,632.289 


4,457.323.293 


1920 


5,783,609.804 
31.764,908,065 


8,663.723,739 


2.880,113,935 


Total 


52,432.927,112 


20,668,019,047 


1921 


2.509.147,570 
34.274.055,635 


4,485,031,356 


1.975,883,786 


Total 


56,917,958,468 


23.643,902,833 



Congressman Fess, of Ohio — in 1914 — is reported to have said: "Any in- 
dustrial history of the United States shows that our export trade began with 
the Crimean war, back in the fifties.** No greater distortion of the facts of 
history is possible. It was to refute the volumes of such Protectionist false- 
hoods that, with much patient research, I have given the reader the above 
table. It is a liberal education in itself as to our Foreign Trade, carried 
thru 131 years of history. The successive Tariffs are also given. Study the 
two together. Make your own deductions as to what extent, and how, 
Tariff Walls affect our Foreign Trade. 



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A Study in World Commerce 89 

A STUDY IN WORLD COMMERCE 

The two preceding charts are designed to give the reader a general vision 
of the World's production of twelve leading commodities. 

These charts will give you stronger and clearer convictions of the abso- 
lute necessity for International Trade than you ever had before. No one 
can have a true idea of Trade who does not include in his mental picture 
the whole of the 1,702,000,000 of the earth's inhabitants, realizing that 
each one of them must have food, clothing and shelter — and must have 
them daily. 

When taking this broad view of Trade we recognize the fact that the 
Exchange of wealth is as necessary as the Production of wealth. Without 
Trade, no advance is possible beyond that crude, primitive condition in 
which each human being — like the lower orders of animals — must provide 
for himself all of life's necessities. 

Civilized life requires that hundreds of products shall enter into the daily 
use and consumption of each human being. No human being produces 
scarcely ev^n one of them for himself in its entirety. How, then, can he 
get all the rest of them. Only by producing something in excess of his own 
needs — and trading his surplus for the rest. 

What is true of the individual is true of nations. Countries in which the 
Production of any given product exceeds its Consumption, must export 
their excess to the scores of countries in which its Consumption exceeds its 
Production. That alone is the law, and THE UNIVERSAL PROCESS 
of Civilized life. 

The first two tables give a comparative view of the sources of supply for 
12 leading commodities, together with the six countries producing them 
most abundantly. 

In reference to any one of the products listed, it is probable that all of the 
six countries under it Produce more of it than they Consume. Hence the 
necessity for Exporting. But if you go on down the line of the countries 
producing it, you will soon reach those that produce less of it than they 
Consume. Add to these the scores of other countries not producing it at 
all; and yet, which must consume it in order to live. Now how can they get 
these commodities of which they Consume more than they Produce, except 
by Importing? But how could they import if there were no such thing as 
International Trade? THUS DO WE SEE THAT COMMERCE IS AS 
ESSENTIAL TO THE LIFE OF OUR EARTH'S INHABITANTS AS 
THE AIR THEY BREATHE. 

This brings us to the table on the opposite page. It shows us that Com- 
merce is in itself a perfect system of International Bookkeeping. The 
equity of it is so exact that it balances all accounts with perfect precision. 
Excess of Production over Consumption, as in the case of Corn, is balanced 
by an Excess of Exports over Imports. 

On the other hand, the excess of Consumption over Production — as shown 
in the case of Flax Seed, Wool and Sugar — must be made up by an Excess 
of Imports over Exports. And since we must import them — or go without 
—WHY SHOULD WE INCREASE THEIR COST TO OURSELVES 
BY A TARIFF WALL? 

So broad and fundamental is the truth here expressed, that the table can 
be applied to each household — and to each individual. Here is an outline 
80 universal in its scope, that it can be applied to every product in reference 
to each nation, and in reference to each of the hundreds of millions of 
humanity! 



Effects of War on Prices 91 



EFFECTS OF WAR ON PRICES 

On the opposite page is a graphic portrayal of the rise and fall of prices, 
due to War. It pictures to the eye and the imagination the Story of World 
Prices for a period of 112 years. This remarkable diagram was given in 
the "Literary Digest" several months ago. 

The Napoleonic Wars really began with Napoleon's Italian Campaign 
in 1796, terminating with the battle of Waterloo, June 18, 1815. The aver- 
age prices in all the markets of the world reached their highest peak by the 
end of the following year. Then, as shown in the diagram, the Interna- 
tional Market Price dropped fully 100% in the next two or three years. 
Prices continued to decline thruout the earth between 1820 and 1830, rose 
slightly before 1840, and again made a rapid decline between 1840 and 1850. 
They rose again between 1850 and 1860. 

Then came the lamentable war between the North and the South, which 
ended April 9, 1865. Prices reached their highest point in the world's 
market about 1867. In this country the general Price Level was continued 
to about 1870, or '72. They dropped nearly 150% in the World's Market 
by 1880. The international Price Level continued steadily to decline down 
to 1897. In this country scores of products did not reach their lowest point 
until 1900, but the lowest average for all products was reached 
about 1897. 

Then, both for this country and the world, prices steadily rose up to the 
opening of the World War. From that date to 1920, the International 
Price Level rose fully 150%, according to the diagram, reaching a higher 
peak than during the Civil War, and to as high a level as was attained at 
the close of the Napoleonic Wars. This gives us a World Vision, projected 
thru 112 years of history, of the law of Supply and Demand. 

Thus, over and beyond the reach of the narrow provincial minds, which 
cannot see beyond the borders of their own little state or province — and 
which think that by building Tariff Walls they can keep the prices of their 
own products out of the mighty stream of price currents which sweeps 
round the whole earth — ^rises the supreme law of the economic world, the 
law of Supply and Demand. 

Each human being is a part of this universal Demand, and furnishes some 
portion of its universal Supplies, if a Wealth Producer. It is not local, but 
general. It is in operation everywhere. While there are as many markets 
— as many Demands for the necessities of life — as there are human beings, 
yet this great Economic Law sees all mankind, not as many, but as One. 

All the millions of nature's children are but units in that great Social 
Organism which spreads itself across national boundaries, reaching from 
pole to pole, round the whole earth — binding all mankind into one supreme 
Demand for the necessities of life. Then it calls upon every land and clime, 
every race and nation, to furnish the material products which can feed the 
hungers and satisfy the needs of this grand total of wants of all humanity. 

And the Social Organism distributes its supplies among the teeming 
milUons of its units just as perfectly as does the Physical Organism-;-each 
in accordance to its Needs. The Price of any product is always highest 
where its Needs are greatest. It is the relation of the quantity of the Supply 
to the quantity of the Demand of each human being, that makes up that 
vast and complex thing, called the World's Market Price. "Who knows 
what earth needs from earth's lowliest creatures?" Only the law of Supply 
and Demand can tell us. 



Price History from 1850 to 1920 93 



PRICE HISTORY FROM 1850 TO 1920 

In the diagram on the opposite page is presented to the eye of the reader 
the History of Prices in our own country, from 1850 to 1920, taken from the 
U. S. Statistical Abstract. I have given the average price for the five years, 
ending with the close of the five year period. The price of Bar Iron is the 
number of dollars a ton, the price of Wool is by the pound, and the price of 
Cotton Sheeting is by the yard. 

The important thing in the diagram is its showing of the general trend of 
prices. What is true of these three products is true of the Price Level of all 
domestic products for the 70 years charted, and also of the World Price 
Level, as shown in the previous chart. Tariffs or no Tariffs, they run paral- 
lel with the World Price Level— THEY ALL GO UP OR DOWN TO- 
GETHER. 

If you have been reading, or hearing. Protectionists* speeches of late, you 
would say that the period from 1850 to 1860 must have been under High 
Protective Tariffs. And that the period from 1865 to 1900 must have been 
under those Democratic "free trade" Tariffs. 

But the facts are almost wholly the other way. By looking at the top 
of the diagram you will see that the period from 1850 to 1860, was under the 
Walker Revenue Tariff of 1846, with average rates of only 25%. In 1857 
these rates were reduced to about 18%. We entered the war on that basis. 
In fact, the only nominally "free trade" period in our whole history was 
from 1861 to about 1867. During this period, when tariffs were laid on 
Foreign Goods, they were also laid on similar Home Goods — and they were 
laid on Home Goods first! That is, external revenues were balanced with 
internal revenues. 

Abraham Lincoln was elected President in 1860. From that date to 
1913, is a period of 53 years. Of those 53 years, only three of them were 
under a Democratic Tariff. I refer to the Cleveland Tariff, from 1894 to 
1897 — and which was so much of a "protectionist" measure that he refused 
to sign it! The whole of the remaining 50 years — quite a long stretch — were 
lived under Republican Tariffs. AND YET PRICES WENT DOWN* 

Beginning with 1867, they were all High Protective Tariffs. The Tariff 
of 1883 increased the rates in the Tariffs of 1867 and 1870. The McKinley 
Tariff of 1890 made them still higher. The rates in the Dingley Tariff of 
1897 were outrageous, tho slightly lower than those of the McKinley Tariff; 
while the Payne- Aldrich Tariff of 1909 increased the rates in the Dingley 
outrage. There you have our Tariff History and our Price History side 
by side. 

Take the case of wool. In 1867 it was given the highest rate in our 
history. And yet the price of wool went down. It declined rapidly till 
1870. It averaged about eight cents a pound higher for the next five years. 
Was there an increase in the Tariff Rate? On the contrary, there was a 
10% reduction of this rate, and of all rates, in 1872. The Tariff of 1883 
restored the rates of 1867. And yet the price of wool continued steadily 
to go down — on thru the period covered by the McKinley High Tariff. 

The Cleveland Tariff put wool on the Free List. But the decline in its 
price was nothing as compared to its decline under the previous 27 years of 
High Protection. This chart ought to remove from the brain of the reader 
the last trace of the whole "obsession" of Protection. 

• No theory of Prices can be sound which does not also consider the volume of the world ■ 
Money in its relation to the volume of the world's exchanges, and of the wealth in txchangf 



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Tariff Rates from Custom House Reports 95 

A STUDY IN TARIFF RATES FROM CUSTOM HOUSE REPORTS 

The average rates collected at the Custom House do not correspond 
WITH THE AVERAGE RATES IN ANY TARIFF BILL. THEY ARE 
ALWAYS LOWER. This is due to the fact that the highes trates in all 
Protective Tariffs tend to be prohibitive. They must be prohibitive, in 
order to be "protective." 

In the diagram on the opposite page we have graphically presented the 
average duties collected each year, under each tariff, from 1890 to 1920. 
At the top of the page is given the name of each successive tariff. The 
space covered by each is indicated by a heavy black line. 

The reader naturally looks at once for those Democratic, "free trade'* 
Tariffs he has been hearing about all his life. They have always been given 
in the plural, as if there was quite a bunch of them. Over and over again 
we have been told; "Whenever we have Democratic Tariffs we always have 
panics." He knows that panics, strikes, labor wars, "hard times" and in- 
dustrial depressions have constituted a good part of our past history. And 
so expects to see numerous "free trade" Tariffs. 

But he looks in vain. THE TARIFF LINE IS UNBROKEN. Where 
are they? In what years were they passed? They do not exist. They 
never did exist. All this talk about them, which fills up so large a part of 
the Congressional Record, is simply the expression of ignorance and du- 
plicity — the vaporings and deceptions of the demagog. The whole record 
is before you. There is in it one Democratic Tariff, and only one. Extend 
the period back from 1913 to 1860, and you still have but the one Demo- 
cratic Tariff — from 1894 to 1897. Thus were 50 years out of the 53 covered 
by Republican Tariffs — up to the Underwood Tariff of 1913. 

While there was but one Democratic Tariff in all that time, there was no 
"free trade" Tariff. In fact the phrase, a Free Trade Tariff, is such a 
contradiction of words as only a Protectionist would make. There can 
be no such thing as Free Trade, so long as there are such stupid and bar- 
barous things as Tariffs. And for the reason that there can be no such thing 
as Free Trade as long as the products of Trade are taxed! 

The blessings of Free Trade can come only when the extortions, plunder 
and oppression of all Tariff Walls have been swept from the earth. And 
this is possible only when all government revenues are raised by some fair 
and equitable system of Direct Taxation. There was a time when nearly 
the whole of our Government's revenues were raised by Tariffs. In 1921, 
only one dollar in every 14 was so raised! 

In every Tariff Bill there are two classes of goods: dutiable and free — 
those which must pay a Tariff Tax, and those which are allowed by Congress 
to enter free. In the diagram opposite, the top line represents the average 
rates on dutiable goods. It is perhaps the more important of the two. The 
lower line represents the combined rates on both free and dutiable. The 
lower line must be read ten points below that shown on the chart. 

Beginning with 1899, the whole trend is downward, even under High 
Tariffs, being only 16 % in 1920. The combined rate that year was only 6 %. 

The proportions of Foreign Goods coming in "free" under the various 
tariffs are as follows: McKinley, 53.4%; Cleveland, 49.5%; Dingley, 45.2%; 
Payne- Aldrich, 52.4%; Underwood, 67.2%.— 

These are the general facts as to Tariff Rates as shown by Custom House 
Reports. The reader must study the chart and make any further com- 
parisons and deductions for himself. 



96 



TARIFF PRIMER 



25 LEADING ARTICLES EXPORTED, 23 OF WHICH ARE ALSO IMPORTED 

Exported Impoktkd 

Cotton /Raw $1,136,408,916 $ 138.743,702 

\ Manufactured 402.041,277 137.431.814 

Iron and Steel. . . ^ 1,112,835.237 50.305.603 

Breadstuffs 1,079,107.701 125.345.323 

Oils 609,671,471 181.815.871 

Meat and Dairy Products 544.074,060 64,374,457 

Vehicles 382,207.667 2.901,465 

Coal and Coke 359,805,006 7,394,686 

Tobacco 288,693,799 98.562,015 

Leather 190,318,659 36,333,838 

Woods 186,502,152 209,031,235 

Chemicals. Drugs, etc 168,999,706 21 1.628,099 

Copper 133,508,675 90.018.689 

Electrical Machinery, Appliances, etc 101,990,004 (none) 

Sugar (Refined) 94,877,045 1.015.188.479 

Paper 89.072 289 84.686,652 

India Rubber 85,436,897 250,334,174 

Fruits and Nuts 84,390,424 116.221.857 

Explosives 56,845.689 1,377.176 

Wool /Raw 4,936,740 126,972,088 

\Manufactured 44,571,002 58,115,537 

Agricultural Implements 46,277,638 5,716,573 

Fertilizers 36,555.812 51.153,989 

Naval Stores (Tar, Pitch and Turpentine) 34,503.389 (none) 

Furs and Fur Skins 32 886,995 93.558.940 

Vegetables 32.784.416 50.420.326 

Paraffine 32,619,318 820,885 

FORDNEY TARIFF AT WORK 

The following table taken from the New York American, Oct, 8. 1922, shows how prices 
have started upward, under the Chemical Schedule, in less than three weeks after the signing 
of the bill. The same thing is taking place under other schedules. 

(per hundred pounds unless otherwise stated) 

Before After 

Barium Chloride (per ton) $85.00 $100.00 

Carbonate of Potash 5.00 6.00 

Caustic Potash 5.60 6.50 

Acetic Acid (28%) 26.70 32.20 

Alcohol, wood (per gallon) , , .62 .72 

Glycerine 17.50 18.00 

White Lead 7,75 8.00 

Formaldehyde 9.00 10.50 

Acetone 14.00 17.00 

Bleach 1.75 2.00 

Citric Acid 45.00 50.00 

Cocaine hydrochloride (per ounce) 6.25 7.25 

Menthol (per pound) 6.00 6.25 

Camphor 83.00 86.00 



WOOL PRICES FROM 1880 TO 1921 
(in cents per pound) 



1880 


... 5S 


1890 


... .37 


1881 


... .49 


1891 


... .37 


1882 


... .46 


1892 


... .35 


1883..... 


... .42 


1893 


... .33 


1884 


... .40 


1894 


... .24 


1885 


... .33 


1895 


... .20 


1886 


... .36 


1896 


... .21 


1887 


... .38 


1897 


... .21 


1888 


... .35 


1898 


... .30 


1889 


... .38 


1899 


... .29 






1900 


... .36 



1901 


... .29 


1912 ... 


... .32 


1902 


... .26 


1913.... 


... .36 


1903 


... .31 


1914.... 


... .30 


1904 


... .32 


1915 


... .36 


1905 


... .35 


1916 


... .45 


1906 


... .38 


1917 


... .57 


1907 


... .39 


1918 


... .90 


1908 


... .38 


1919 


... .92 


1909 


... .38 


1920 


... 1.12 


1910 


... .40 


1921,... 


... 54 


1911..... 


... .34 







Payne- Aldrick, Underwood and Fordney Tariffs 97 



PAYNE-ALDRICH, UNDERWOOD AND FORDNEY TARIFFS 

In order to get a comparative view of the tariff rates in the last three 
Tariffs, I shall present the contrasts and reductions made by the Underwood 
Tariff to the rates in the Payne-Aldrich Tariff, as stated by Senator Under- 
wood on the day he introduced his bill in the House — April 23,1913 — and 
which comparisons were undenied thruout the debate. Mr. Underwood 
said: 

"Now, I would like the gentlemen on that side of the House (the Repub- 
lican side,) who have maintained this indefensible system of taxing the poor 
for five decades, to listen to the other side of the story. On common soap 
you placed a tax of 20%. We have lowered the tax to 5%. 

"You taxed the furniture of the poor man's house 35%. We have 
lowered it to 15%. 

"You taxed bread and biscuit 20%. We place them on the Free List. 

"On cotton clothing you taxed the people of this country 50 %. We have 
reduced it to 30%. 

"On the flannels that protect them against the cold winter storms you 
taxed the people of the United States over 93%. We have reduced the 
tax to 25% and 35%. 

"The tax on women's and children's dress goods under your system of 
levying a tax for the benefit of the manufacturer, was about 100%. We 
have lowered that to 35%. 

"You taxed the shoes of the people of the United States, after giving the 
shoemaker free raw material — and stating at the time you gave it that he 
did not need the protection — you gave him 10% and we give free shoes to 
the people of America. 

"On the entire chemical schedule the tax was 25.91%. Our taxes levied 
on that schedule was 19.64%, or a reduction in the chemical schedule of 
24% below the Payne law. 

"On earths, earthenware and glass ware, you levied a tax of about 51%. 
We levy a tax of 33%, a reduction below the Payne Bill of 35%. 

"On metals and manufactures of metals, you levied a tax of 34%. We 
levy a tax of 20 %, a reduction below the Payne Bill of 41 %. 

"On wood and the manufactures of wood, you levied a tax of 12 % and we 
levy a tax of 33^%, a reduction of 71%. We place most of it on the free 
list, in order that American workmen may have lumber with which to 
build their own homes. 

"You have levied a tax on sugar of 48%. We have reduced that tax to 
35% for the next three years, or a reduction of 25%; and at the end of the 
three years we intend, if this bill becomes a law, TO PLACE IT ON THE 
FREE LIST. So that the one commodity above all others that most 
directly reflects the taxes levied at the custom house no longer goes on the 
table of the consumer bearing the marks of 50 YEARS OF OPPRESSIVE 
TAXATION that our friends on that side of the House have taught the 
American consuming public to realize when they open their home door. 

"As to tobacco and the manufactures thereof, we consider them as lux- 
uries, or in the nature of luxuries, and good revenue producers, and so made 
no vital changes in the schedule. 



98 TARIFF PRIMER 

"On agricultural products and provisions we have reduced the tax from 
29% to 17%, a reduction of 42%. 

"On spirits, wines, and other beverages we have left the taxes as they are 
in the present law. 

"On cotton manufactures you taxed the public about 46%. We reduced 
the average tax to 30%, making a reduction of 33% below the Payne Bill. 

"On flax, hemp and jute and their manufactures we have reduced the tax 
from 45 % to 26 %, a reduction of 42 % below the Payne Bill. (Flax, hemp 
and tow were afterwards put on the Free List.) 

"On wool and manufactures of wool, you taxed the public nearly 56%. 
We tax them 183^%, a reduction in favor of the American people of 67% 
below the Payne Bill. 

"On silk goods the tax was about 52%. We tax it 44%, or a reduction 

of 15%. 

"On paper and books you taxed them 21%. We tax them 12%, or a re- 
duction of 45%." 

The following quotation, from the Literary Digest — Sept. 2, 1922 — 
shows the increase in rates made by the Fordney-McCumber Tariff over 
the rates in the Underwood Tariff: 

"The new tariff bill, the New York Evening Post (Ind.) has said, 
*makes the free breakfast table a mockery,' and in this paper Mr. William 
O. Scroggs, the economist, recently recounted 'the short and simple but 
somewhat intimate annals of a morning hour in the life of a plain middle- 
class American consumer,' to 'see how the tariff penetrates into the inner 
temple of his existence.' To quote from this story as amended by Mr. 
Scroggs to fit the final form of the Senate Bill; 

" 'His day begins when he is aroused by an alarm clock, and the new 
tariff bill raises the duty on this article 67 per cent. His first act is to throw 
off the bed-covering, on which the duty has been increased 60 per cent. He 
jumps from his bed, on which the duty is advanced 133%, and dons a 
summer bathrobe, with the duty up 60 per cent., and slippers, with the 
duty increased 33 per cent. 

'He walks over a Brussels carpet (duty up 100 per cent.) to close the win- 
dow, the duty on the pane of which has been raised 33 per cent., and adjusts 
the shade (duty up 20 per cent.) and curtains (up 50 per cent.). Then he 
enters the bathroom, stands before a mirror, on which the duty has been 
raised 100 per cent., sets out his shaving-stick, subject to an increase in duty 
of 67 per cent., his shaving-brush (duty up 30 per cent.), and razor (up 100 
per cent.), and begins his tonsorial operations. This over, he devotes his 
attention to the bathtub, on which the duty has been raised 100 per cent. 
Towels (with the duty up 60 per cent.), soap (up 67 per cent.), tooth-brush 
and hair-brush (up 30 per cent, each), and comb (up 67 per cent.) are next 
in demand. 

'As our comsumer dresses, it may be noted that the new bill increases the 
duty 60 per cent, on his underwear, 33 per cent, on his hose, 15 per cent, on 
his shirt and collar, 20 per cent, or more on his necktie, and 60 per cent, on 
his suit of clothes. 

'Our consumer decides to discard his waistcoat and transfers fountain-pen 
(up 100 per cent.), penknife (up 200 per cent.), and lead pencil (up 80 per 
cent.) from waistcoat to coat-pockets, picks a fresh linen handkerchief (up 



Payne- Aldrich, Underwood and Fordney Tariffs 99 

30 per cent.) from the dresser (up 133 per cent.), polishes his eyeglasses (up 
15 per cent.), and after giving his clothes a touch with a brush (up 57 per 
cent.), is ready for breakfast. 

'At the breakfast-table our consumer spreads a napkin (duty up 15 per 
cent.) on his knees, and turns on the current for his electric toaster, on which 
the duty has been advanced 160 per cent. He drinks water from a glass, 
on which the duty is 45 per cent, higher, and begins his breakfast with an 
apple (duty up 200 per cent.) baked with sugar (duty up 84 per cent.) in an 
aluminum dish (up 150 per cent.) on a cast-iron stove (duty up 100 per cent.) 

'The duty is also advanced 27 per cent, on his chinaware, 20 per cent, on 
his table silverware, 200 per cent, on his oatmeal, and 225 per cent, on his 
butter. The cream for his coffee has been removed from the free list and 
subjected to a duty of 223^ cents a gallon, and his eggs also have been taken 
from the free list and made dutiable at 8 cents per dozen. The salt for his 
eggs likewise comes off the free list, and so does his bacon and the flour that 
goes into his bread. Even the duty on the salt-shaker gets a boost of 45 
per cent. 

'The only things on his table that have not been subjected to a higher 
tariff duty are his coffee and his drinking-water.' " 



100 TARIFF PRIMER 



THE SCRAMBLE BEGINS FOR STILL HIGHER RATES 

The Fordney-McCumber Tariff did not settle tariff rates. It just unsettled 
them. No one can tell what the tariff rates will be on a single article — 
except dyes — three months ahead. This for the reason that the Fordney 
Tariff gave to the President the unparalleled power to raise or lower the 
rates on any product 50%. It did more. It gave him the power also to 
change the present basis of Foreign Valuation, to American Valuation. 
In making tnis shift alone—without adding additional tariff — he can often 
change rates fully 50%, and in some cases, 100%. 

As showing the workings of this unprecedented, and probably unconsti- 
tutional, procedure, I will give clippings from an article I find in the New 
York World, just as the book is going to the printer's: 

TARIFF GLUTTONS HUNGER FOR MORE 

{Special to the N. F. World) 

WASHINGTON, Oct. 12.— Seekers of still further tariff bounties already 
are pressing the United States Tariff Commission to take advantage of new 
provisions of the Fordney-McCumber act whereby the President is allowed 
to jack up rates by 50 per cent., if he deems it necessary, in order to "equalize 
production costs here and abroad." 

Upward of fifty notices have been entered with the commission so far by 
beneficiaries of the new tariff who want additional concessions that will 
shut foreign goods out of the American market and thereby permit of higher 
prices for domestic articles. Many verbal communications also have come 
in. The commission inteiprets this early stream of applications to mean 
an ensuing floodtide that not only will swamp the commission with work 
but necessitate at least a doubling of its expenses. 

Woolen, cotton, steel, chemical and other manufactuiers are among these 
first applicants for bigger benefits at once, not being satisfied with the 
already unprecedentedly high tariff rates. 

The new law specifies that the Commission must hold hearings on these 
applications and then determine the actual difference between the cost of 
production heie and abroad. According to veteran experts of the commis- 
sion, this is impossible, to begin with, since production costs not only are 
fluctuating rapidly because of present unsettled economic conditions, but 
foreign manufacturers both resent and forbid such prying into their secrets. 

Although the commission is, in theory, an impartial judicial body, its 
members are not blind to the tremendous political power which the Fordney- 
McCumber bill confers on the President; and since the clamor for readjust- 
ment by Presidential proclamation already has started, reinforced by poli- 
tical pressure, expectations are that the commission will find itself FORCED 
INTO APPROVING CONSTANT INCREASES, OR ELSE HAVING 
ITS RECOMMENDATIONS OVERRULED." 



